EMERGING MARKETS-Latam assets mixed in post-holiday trade; Peru stocks drop after President's removal

By Pranav Kashyap and Ragini Mathur

Feb 17 (Reuters) - Latin American currencies and stocks were mixed on Tuesday as markets gradually picked up activity after a U.S. holiday, with Peru's latest political upheaval capturing investors' attention.

Trading was subdued after a U.S. holiday on Monday drained volumes, while several Asian markets and bourses in Brazil and Argentina stayed shut. The Latin American equity index .MILA00000PUS inched 0.09% lower, while the region's currency gauge .MILA00000CUS edged 0.07% up.

PERU'S POLITICAL STORM WEIGHS

Peru's Congress ousted President Jose Jeri after just four months in office following a scandal over undisclosed meetings with a Chinese businessman, continuing the country's revolving door of leaders. The country has been stuck in near-constant political turbulence, racing through seven presidents since 2016.

Peruvian equities .MXNUAMPESCPGPE fell to an over two-week low, down 1.3%, and were on course for their fourth session of declines — the longest run since November last year. The sol PEN= was flat in thin turnover. Peru's stock market, last year's standout in the region, remains up over 19% year-to-date.

More broadly, the Latin American equity gauge has outperformed both the S&P 500 .SPX and Europe's STOXX .STOXX so far this year, up roughly 17%. Analysts say the rally could have further room to run, aided by rotation away from richly valued U.S. tech and renewed demand for cheaper, overlooked pockets of global markets.

Brazil .BVSP has been among the year's standout performers, with investors positioning for the central bank to potentially begin easing as soon as March.

"Brazil's strong equity inflows have continued into 2026, extending the momentum from last year as investors remain attracted to valuations that still look appealing," said Dev Ashish, Latin America economist at Societe Generale.

"Resilient earnings, supportive EM sentiment, and institutional stability are sustaining flows."

In Chile, the world's largest copper producer, stocks .SPIPSA and the peso CLP= both fell 0.2% and 0.3%, respectively, as copper prices slipped under pressure from a stronger dollar weighing on metals.

Mexican .MXX and Colombian stocks .COLCAP declined 0.3% and 0.03%, respectively, while their currencies MXN=, COP= traded higher.

Beyond Latin America, Romania's central bank held its benchmark rate at 6.50% as expected on Tuesday, saying the temporary impact of higher taxes and power prices argued for patience, with inflation seen returning to target in the first half of 2027.

Bucharest stocks .BETI rose 0.8%, while the leu EURRON= was marginally lower.

Key Latin American stock indexes and currencies: