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EMERGING MARKETS-Argentine stocks climb after Lebac note auction

SAO PAULO/BUENOS AIRES, May 16 (Reuters) - Argentina's stock market climbed on Wednesday after the central bank held a successful auction of its Lebac notes the previous day, but the peso ended slightly weaker as the bank sold no dollars on the spot market.

Late on Tuesday, Argentina's central bank sold 620.93 billion pesos ($26 billion) of short-term Lebac securities at its monthly auction, compared with about 616 billion pesos' worth of securities that matured.

That came after the central bank raised the interest rate on the security to about 40 percent, up from 26.3 percent previously.

In recent weeks, the Argentine peso has deteriorated rapidly, spurring the government to seek a financing agreement from the International Monetary Fund. On Monday, the currency fell some 6 percent, hitting an all-time low.

On Tuesday, however, the peso snapped a losing streak, closing up 3.73 percent after the central bank sold $791 million on the spot market.

On Wednesday, the rally briefly continued after the Lebac auction, but ended the day slightly weaker, with the peso down 0.78 percent at 24.29 to the dollar as the central bank did not sell dollars on the spot market.

Argentina's benchmark Merval index closed up more than 3 percent.

Elsewhere in the region, Brazil's benchmark Bovespa index closed up 1.65 percent, while Mexico's IPC index closed up 0.35 percent.

Mexico's peso closed up 0.49 percent after it rallied on the news that independent presidential hopeful Margarita Zavala dropped out of the race, which some think could help a business-friendly candidate.

Latin American stock indexes at 2140 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 1155.09 0.42 -0.29 MSCI LatAm 2825.94 0.89 -0.08 Brazil Bovespa 86536.97 1.65 13.27 Mexico IPC 46419.77 0.35 -5.95 Chile IPSA 5727.86 0.3 2.93 Chile IGPA 28957.44 0.32 3.49 Argentina MerVal 31660.57 3.21 5.30 Colombia IGBC 12366.08 -1.93 8.75 Venezuela IBC 21797.17 5.96 1625.63 (Reporting by Gram Slattery in Sao Paulo and Walter Bianchi in Buenos Aires; Editing by Tom Brown and Grant McCool)