EMERGING MARKETS-LatAm FX dips, stocks slide as tech, commodity rout saps risk appetite

By Purvi Agarwal

Feb 5 (Reuters) - Most Latin American currencies weakened against the dollar on Thursday, as an ongoing rout in technology stocks and precious metals induced volatility into markets, dampening investor appetite for EM equities as well.

Stock indexes in Mexico .MXX and Colombia .COLCAP fell 0.3% and 1.4%, tracking an over 2% drop in oil prices.

Equities in Chile .SPIPSA - the world's biggest copper exporter - lost 1.1% as copper prices retreated, tracking losses in precious metals.

Gold prices slid and silver sank over 11% as investors booked profits after a two-session rally, extending the whiplash in commodity markets that has largely impacted resource-heavy emerging markets.

An ongoing sell-off in technology stocks also induced fresh volatility in equity markets.

"It's been a tough week for investors who were heavily exposed to the parts of the market that led the upside. Technology and AI, but more recently we've also seen gold and precious metals sell off," said Mona Mahajan, principal, head of investment strategy and asset allocation at Edward Jones.

"Investors need to be more thoughtful in diversification. Emerging markets and international equities have held up better and we see opportunity out there, but it's a diversified opportunity set."

On the flip side, heavyweight Brazilian stocks .BVSP gained 0.7%, largely buoyed by a 1.7% gain in Itau Unibanco ITUB4.SA after the lender estimated on Wednesday its loan book will grow by up to 9.5% this year, as it posted a fourth-quarter recurring profit.

The gains limited overall losses on MSCI's index tracking Latin American stocks .MILA00000PUS, down 0.9%.

On the FX front, most currencies weakened against the greenback, partly aided by the dip in commodity prices.

Currencies in Mexico MXN= and Colombia COP= dipped 0.3% and 0.9% respectively, while Chile's peso CLP= depreciated 0.7%.

Mexico awaits a monetary policy decision where the central bank is expected to keep interest rates on hold.

Brazil's real BRL= was down 0.3%, bringing the MSCI measure of regional currencies .MILA00000CUS down 0.3%.

Argentina's peso ARS=RASL bucked the trend, gaining 0.1%. Argentina and the U.S. signed an agreement on critical minerals on Wednesday to strengthen and secure supply chains, amid a U.S. push for a preferential trade bloc for critical minerals.

Elsewhere in EMs, Ukraine and Russia met for U.S.-brokered talks in Abu Dhabi, after a first day described as productive and positive by both Kyiv and Moscow.

Ukraine's international bonds, which have rallied to record highs earlier this week on hopes of a ceasefire between the warring countries, were stable.

The Czech central bank held interest rates steady, as expected, despite a drop in inflation to a nine-year low and indications that policymakers might consider further easing.

Moody's cut Indonesia's credit rating outlook to negative from stable, citing reduced predictability in policymaking days after MSCI flagged transparency issues that triggered a market rout of more than $80 billion.

Longer-dated dollar-denominated bonds, which had been flat for most of the trading day, were down between 0.3-0.5 cents, with many trading at their weakest level in five months, Tradeweb data showed.

Key Latin American stock indexes and currencies: