EMERGING MARKETS-LatAm equities advance tracking global risk sentiment, Venezuela remains in focus

Recasts with afternoon prices

By Twesha Dikshit, Ragini Mathur and Pranav Kashyap

Jan 6 (Reuters) - Latin American equities pushed higher on Tuesday as investors kept a close watch on developments in Venezuela, while supportive domestic backdrops, and a sharp rally in metal prices continued to lift regional markets.

Venezuela's main opposition leader Maria Corina Machado vowed to return home quickly, praising the U.S. administration's action against Nicolas Maduro, and saying her movement was ready to win a free election.

The country's international bonds continued their upward momentum, rising as much as 2.9 cents against the dollar. The defaulted 2034 note was bidding at 43.28 cents on the dollar, Tradeweb data showed.

Caracas' benchmark stock index .IBC gained 50% and is up over 38% so far this year, as of Monday's close.

"Increasing U.S. control of Venezuelan oil exports implies that Venezuela’s current export markets may need to find alternative sources of supply in the medium term. This is particularly relevant for both Cuba and to a lesser extent China," said Peter Kinsella, head of investment services UK at Union Bancaire Privée.

Venezuela's main oil ports entered their fifth day without delivering crude for state-run PDVSA's customers in Asia, shipping data showed on Tuesday. U.S. President Donald Trump said he might subsidize oil companies to rebuild the South American nation's energy infrastructure.

MSCI's Latin American equities index .MILA00000PUS rose 1.28% while the corresponding currency gauge .MILA00000CUS ticked up 0.4%.

LATAM EQUITIES GAIN FROM GLOBAL RISK-ON SENTIMENT

Venezuela's latest upheaval could be turning out to be more of a geopolitical headline than a major market-moving event.

With the country's economic heft diminished, Latin American equities have so far taken it in stride. Instead, the region is riding a strong risk-on start to the year, as global markets opened the calendar with solid gains. That upbeat tone, powered by expectations a gentler Federal Reserve rate outlook has broadened risk appetite. The dollar also started the year on soft footing boosting local currencies.

Colombian equities .COLCAP gained 1.2%, Chile's .SPISA gained 2.19% while Peruvian shares .MXNUAMPESCPGPE added 1.7%. Peru's equities have been trading at record highs bolstered by rallying metal prices.

Chile's currency CLP= was up 1% against the dollar, while the Colombian peso COP= also ticked higher.

Brazil's benchmark index .BVSP advanced 1.2% while the real BRL= strengthened 0.59% against the greenback. S&P Global's PMI data showed services activity expanded in December at its fastest pace in over a year.

Mexico's peso MXN= dipped against the dollar while stocks .MXX traded higher. Seasonally adjusted consumer confidence index improved in December after three months of declines, data from the statistics institute showed.

Elsewhere in emerging markets, Saudi Arabia said it would open the financial market to all categories of foreign investors from next month. The iShares MSCI Saudi Arabia ETF KSA.P rose 2.7% following the news.

Ukraine security guarantees to include binding commitments in case of a future armed attack by Russia, according to a draft statement prepared ahead of a summit in Paris.

Key Latin American stock indexes and currencies:-

(Reporting by Twesha Dikshit and Pranav Kashyap, Editing by Nick Zieminski)

((Twesha.Dikshit@thomsonreuters.com;pranav.kashyap@tr.com))