By Aaron Saldanha May 24 (Reuters) - An index of Latin American stocks marked time on Friday, on course to post a solid weekly gain, as did Latin American currencies, which held ground against the dollar.
Investor sentiment towards the region has been marred this week by a worsening of U.S.-China trade ties amid Alphabet Inc's Google suspending some business with Chinese telecom giant Huawei Technologies Co Ltd early this week.
China's economy - the world's second largest - influences Latin American markets as its factories buy a large portion of the continent's resources exports.
Markets were set to end the week in positive territory on hopes U.S.-China trade talks will resume, Banorte Research Chief Economist and Head of Research Gabriel Casillas wrote in a note, citing U.S. President Donald Trump hinting on Thursday Huawei could be included in some form of a trade deal.
MSCI's index of Latin American stocks was flat, but on track to post a 2.5% weekly gain, its first weekly rise since April. MSCI's Latin American currencies index was set to add 0.6% for the week.
Brazil's real edged firmer, while Sao Paulo-traded stocks tacked on 0.4%, supported by gains among materials and energy stocks.
State-run oil firm Petroleo Brasileiro SA (Petrobras) saw its common shares and preferred shares rise 0.7% and 1.1% , respectively, as Brent crude futures started their recovery following Thursday's 4.6% drubbing.
Vale SA rose 2.8%, after Bank of America Merrill Lynch boosted its rating and price target on the miner's U.S.-listed shares to "Buy." Mexican stocks slid 0.4%, while the peso softened 0.1%.
Latin America's second-largest economy contracted in 2019's first quarter, from the previous three-month period, in a blow to the new government's drive to convince investors it can boost growth.
International investor sentiment toward Mexico has softened of late. U.S.-domiciled investors have yanked about $262 million in total from a commonly traded Mexico-focused equity ETF over the three weeks ended Wednesday, Lipper estimates show.
Chile's peso rose 0.4%, supported by a gain in the price of copper, the country's top export and a commodity which is greatly exposed to slowing Chinese growth.
Argentina's stocks rose 0.5%, while the peso firmed marginally.
Colombia's peso firmed 0.7%, while local stocks tacked on 0.6%, with oil firm Ecopetrol SA up 0.3% on firmer oil prices.
Latin American stock indexes and currencies at 1437 GMT Stock indexes daily % Latest change MSCI Emerging Markets 988.64 0.39 MSCI LatAm 2596.54 0.01 Brazil Bovespa 94277.20 0.39 Mexico IPC 42638.30 -0.41 Chile IPSA 4909.43 0.32 Argentina MerVal 34564.11 0.54 Colombia IGBC 12057.53 0.57 Currencies daily % change Latest Brazil real 4.0317 0.37 Mexico peso 19.0585 -0.11 Chile peso 694.2 0.37 Colombia peso 3355.7 0.59 Peru sol 3.342 0.21 Argentina peso (interbank) 44.9800 0.24 (Reporting by Aaron Saldanha in Bengaluru; Editing by Andrea Ricci)