EMERGING MARKETS-Latam stocks outpace EM peers; Brazil, Mexico post higher-than-expected inflation

* Mexico early Jan prices exceed market forecasts * Petrobras hikes gasoline prices before board vote on Lula’s CEO pick * Venezuela’s inflation slows to 234% in 2022, vice president says * Brazil inflation slightly higher than forecast in early Jan * Stocks up 0.6%, currencies up 0.1% By Bansari Mayur Kamdar Jan 24 (Reuters) – Latin American stocks outperformed their emerging market peers on Tuesday, extending gains for a third straight session, while investors assessed data from Brazil and Mexico that showed inflation rose more than expected in early January. The MSCI’s index for Latin American stocks rose 0.6% compared to a tepid broader EM index. Brazil’s Bovespa index gained 0.5%, with banking stocks leading gains. Shares of Brazilian state-run oil company Petrobras rose 0.5%, also providing a boost to the Bovespa index, on saying it will increase refinery gate gasoline prices, as its board of directors prepares to vote on President Luiz Inacio Lula da Silva’s pick for the chief executive role. Data showed Brazil’s annual consumer prices came in slightly above market expectations in the month to mid-January, as policymakers in Latin America’s largest economy work to lower inflation to the central bank’s target. Latin America’s currencies index added 0.1% by 1450 GMT, with the Brazilian real advancing 0.9%. In Mexico, headline inflation accelerated and exceeded expectations in early January, data from the national statistics agency showed, marking the first monthly pickup since September as markets brace for fresh interest rate hikes ahead. “That would be tough news for Mexican equities, because it would further cool talk of Banxico potentially ending its tightening campaign prior to the Fed,” wrote Greg Anderson, global head of FX strategy at BMO Capital Markets, wrote in a note. “But for the peso, with the way that it has traded much more on the carry story than on the equities story over the past year, high inflation is good news.” The Mexican peso weakened 0.3% against the dollar, while stocks in Mexico rose 0.3%. Elsewhere in Latin America, currencies of commodity producers such as Chile’s peso and Colombia’s peso added 1.1% and 0.1%, supported by firm commodity prices. The Peruvian sol slipped 0.1%. Venezuelan Vice President Delcy Rodriguez said inflation in the South American country hit 234% in 2022, representing a slowdown from the previous year, as it struggles with a deep and lengthy economic crisis. Among other emerging market peers, Hungary’s forint gained 1.2% against the euro after the National Bank of Hungary kept its base rate at 13% the highest in the European Union, as inflation shows no respite. Key Latin American stock indexes and currencies at 1450 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1038.73 0 MSCI LatAm 2307.16 0.72 Brazil Bovespa 112437.24 0.63 Mexico IPC 54497.19 0.29 Chile IPSA 5314.31 0.05 Argentina MerVal 248686.43 -0.669 Colombia COLCAP 1331.10 -0.05 Currencies Latest Daily % change Brazil real 5.1577 0.78 Mexico peso 18.8532 -0.28 Chile peso 805.2 0.89 Colombia peso 4545.86 0.23 Peru sol 3.878 -0.36 Argentina peso (interbank) 184.7000 -0.18 Argentina peso (parallel) 377 -0.27 (Reporting by Bansari Mayur Kamdar and Amruta Khandekar in Bengaluru Editing by Alistair Bell)