* Argentina rebounds after sharp sell-off * Brazil equities record slim gains * Fed rate cut hopes underpin sentiment By Niket Nishant Oct 15 (Reuters) – Latin American stocks and currencies rebounded on Wednesday after dovish remarks from U.S. Federal Reserve Chair Jerome Powell, while Argentine equities gained ground following a turbulent Tuesday session. With a 1.01% jump, Argentina's local stock index emerged as one of the region's top gainers. Traders attributed the rebound to portfolio buybacks following a sell-off sparked by U.S. President Donald Trump linking Washington's financial lifeline to President Javier Milei's midterm election prospects. In a show of support last week, the U.S. Treasury finalized a $20 billion currency swap framework with Argentina. The Argentine wholesale peso fell 2.16% on Wednesday. "Any political setback would likely bring FX stress back, hitting banks and consumer-focused sectors first," said Matthew Tuttle, CEO of Tuttle Capital Management. The Brazilian real slipped 0.7% against the dollar while the Bovespa index added 0.65%, as investors eyed planned discussions of fiscal measures. The government will begin talks on new ways to offset Congress' decision to shelve a tax overhaul that was crucial to the target of eliminating the primary deficit this year. Data released on Wednesday also showed that retail sales volumes in Latin America's largest economy rose 0.2% in August from a month ago, in line with analyst expectations. FED CUES, STEADY GEOPOLITICS LIFT SENTIMENT Dovish cues from the Fed generally pressure the U.S. dollar , which was down on Wednesday, easing strain on emerging market currencies and drawing investors toward riskier assets. A softer dollar also cuts borrowing costs on dollar debt, offering relief to indebted economies and firms. Latin American economies are major commodity exporters and a weaker greenback also underpinned prices of crude oil and copper. MSCI's gauge for Latin American equities rose 2%, while a parallel index tracking regional currencies was up 1.6%. Calmer geopolitics particularly in the Middle East further buoyed risk appetite, with the shift visible across equities and debt. Israel's and Egypt's bonds maturing in 2050 gained. Senegal's international notes also rallied sharply after IMF chief Kristalina Georgieva pledged to step up talks on a new Fund-supported program for the West African nation. Mexican stocks rose 1.3%, while the peso rose 0.22%. Local investors focused on the first reports of third-quarter corporate earnings season. Shares of telecom giant América Móvil were among the best performers, up 2.22% after it reported a more than threefold increase in quarterly profit on Tuesday. Peru's Lima Stock Exchange rose 1.3%. The country is a major exporter of copper, which rose on Wednesday. Some analysts said Latin American assets may continue to perform strongly as carry trade opportunities widen, though political risks and uneven fiscal outlooks could limit gains. Carry trade involves investors borrowing cheaply in dollars and chasing higher yields in emerging markets. Key Latin American stock indexes and currencies: Equities Latest Daily % change MSCI Emerging Markets 1365.47 1.98 MSCI LatAm 2468.38 1.56 Brazil Bovespa 142609.06 0.65 Mexico IPC 61668.60 1.29 Argentina Merval 1908370.46 1.013 Chile IPSA 9075.94 0.69 Colombia COLCAP 1890.57 -0.06 Currencies Latest Daily % change Brazil real 5.4446 0.68 Mexico peso 18.457 0.22 Chile peso 798.43 0.28 Colombia peso 3958.41 0.34 Peru sol 3.4124 0.34 Argentina peso (interbank) 1390 -2.16 Argentina peso (parallel) 1435 -1.05 (Reporting by Niket Nishant in Bengaluru Editing by Bill Berkrot)
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