EMERGING MARKETS-LatAm stocks underperform EM peers; Argentina bucks trend

By Niket Nishant

Dec 29 (Reuters) - Latin American equities fell on Monday, underperforming emerging market peers as a pullback in gold prices dragged on bourses in export-driven economies.

The moves coincided with a subdued mood on Wall Street, where main indexes slipped as investors turned cautious following last week's rally.

While a one-day move during a holiday-shortened week is unlikely to alter the trajectory for regional stocks, poised for their best year since 2009, it highlights how closely sentiment remains tethered to commodity demand and U.S. cues.

The MSCI index tracking Latin American stocks .MILA00000PUS fell 0.6%, while the currency gauge .MILA00000CUS dropped 0.5%.

Elsewhere in emerging markets, Asian stocks rallied on Monday.

GOLD RETREAT DAMPENS OPTIMISM

Peru's Lima bourse .MXNUAMPESCPGPE fell 1.6% after hitting a record high in the previous session, as the price of gold, one of the country's top exports, slipped.

"While this rally in gold has not, and will not, be linear, we believe the trends driving this rebasing higher in gold prices are not exhausted," said Natasha Kaneva, head of global commodities strategy at J.P. Morgan.

Equity benchmarks in Brazil .BVSP and Mexico .MXX, other regional heavyweights, fell 0.2% and 0.3%, respectively.

Argentina's Merval stock benchmark .MERV bucked regional weakness, rising 1.6% days after Congress passed the first budget since President Javier Milei took office.

CURRENCIES SUBDUED

Regional currencies also fell, with Brazil's real BRL= leading losses. The currency dropped 0.5% and has lost nearly 4.4% so far this month due to expectations that the central bank may begin lowering interest rates.

Earlier this month, President Luiz Inacio Lula da Silva said he "could smell" reductions coming soon.

The Chilean peso CLP= fell 0.5% and the Colombian peso COP= dipped 0.3%.

In Honduras, investors are closely tracking the aftermath of Nasry Asfura's victory in the presidential election. Backed by U.S. President Donald Trump, Asfura was declared the winner after weeks of technical problems and allegations of fraud.

The country's dollar-denominated bonds were mixed.

Key Latin American stock indexes and currencies: