EMERGING MARKETS-LatAm assets slip in holiday-thinned week; Ukraine bonds fall on stalled peace talks

By Purvi Agarwal and Ragini Mathur

Feb 18 (Reuters) - Most Latin American currencies and stocks dipped on Wednesday in subdued trading during a holiday-curtailed week for some markets, while Ukraine's bonds slid as ceasefire hopes showed signs of fading.

MSCI's index tracking LatAm currencies .MILA00000CUS was down 0.2%, while the stocks gauge .MILA00000PUS fell 0.3%.

EM assets have extended their stellar rally from 2025 into this year, with stocks of Asian chipmakers and technology companies benefiting from an AI boom, while commodity-heavy Latin American and South African markets capitalized on the frenzy in metals markets.

Despite wild swings in metal prices earlier this month, Latin American investors have remained relatively unfazed, drawn instead by attractive carry trade opportunities in markets with higher interest rates.

"I would say that we are seeing some sort of a positioning and profit taking in LatAm today," said Andres Abadia, chief Latin America economist at Pantheon Macroeconomics.

"There are many regional currencies that have outperformed in recent months compared to other emerging markets."

UKRAINE TALKS COLLAPSE, BONDS SLIDE

Peace talks between Ukraine and Russia in Geneva ended after only two hours on Wednesday, with Ukraine's President Volodymyr Zelenskiy describing them as "difficult" and accusing Russia of deliberately delaying progress toward a deal to end the four-year-old war.

International bonds in Ukraine broadly slipped over 1 cent on the dollar, with the one maturing in 2034 US903724CA89=TE falling 1.3 cents, as fading hopes of a ceasefire weighed on sentiment.

"There is still a significant divide among the Russian, Ukrainian, and U.S. positions on the key issues... This is likely to prevent a near-term resolution of the deal," said Nikola Apostolov, an analyst at Citigroup, highlighting that this was a "good profit-taking opportunity".

Back in LatAm, Peru's stocks .MXNUAMPESCPGPE rebounded 1.6% after logging four sessions of declines, while the sol currency PEN= was 0.2% lower.

The country plunged into political uncertainty again on Tuesday as its Congress ousted President Jose Jeri after just four months in office, following a scandal over undisclosed meetings with a Chinese businessman.

Argentina posted a fiscal surplus of 3.13 trillion pesos ($2.23 billion) after ending December with a deficit. The country's stocks .MERV fell 3.2%, while the peso ARS=RASL gained 0.3%.

Brazil's real BRL= depreciated 0.3%, while stocks .BVSP traded 0.6% lower.

Mexico's peso MXN= and stocks .MXX declined 0.5% and 0.2%, respectively.

Colombia's peso COP= fell 0.9%, though stocks in the country .COLCAP were little changed.

Chile's peso CLP= appreciated 0.3%, while stocks .SPIPSA were 0.3% lower.

Key Latin American stock indexes and currencies: