EMERGING MARKETS-Colombian stocks lead Latin America shares lower; investors cautious about AI risk

By Pranav Kashyap

Feb 26 (Reuters) - Most Latin American currencies and stocks drifted lower on Thursday, with investors turning cautious about the AI trade.

Colombian stocks .COLCAP slumped 2.9%, while the peso COP= fell 1.5%, both touching their lowest points in over 1-1/2 months. Ecuador said it will increase tariffs on Colombian imports to 50% from the current 30% from March 1, the government said in a statement on Thursday.

MSCI's index tracking stocks in the Latam region .MILA00000PUS fell 1.1%, and its currency equivalent .MILA00000CUS slipped 0.1%.

Share performance by country was a patchwork. Peru's stocks .MXNUAMPESCPGPE fell 0.6% and Argentina .MERV added 0.5%, while Mexico .MXX slipped 0.3%, and Brazil .BVSP eased 0.8%.

Markets were digesting Nvidia's NVDA.O latest results, often treated as a bellwether for chip demand and the market's broader risk appetite. The company's shares fell nearly 5% in morning trading.

REAL TURNS LOWER, BRAZIL ECONOMY COOLS

Brazil's real BRL=, down 0.4%, was on track for a roughly 2% monthly gain, though that would be only about half the increase of January's rally. The currency has been under pressure as a run of data points to a cooling economy and traders position for what could be Brazil's first rate cut since 2024, as soon as March.

The real has resumed its downtrend, Kenneth Broux, head of corporate research at Societe Generale, noted.

"The political dimension cannot be overlooked for the outperformance of the real."

Even with Thursday's softer tone, Latin America's equity and currency gauges were poised for a 10th straight week of gains. They have benefited from a tentative rotation away from U.S. exposure this month, with the equity index on course for its strongest two-month run since December 2023.

The shift comes as investors weigh possible cracks in the AI trade, stretched tech valuations, and uncertainty around President Donald Trump's tariff agenda.

February, more broadly, has been a policy-heavy month across emerging markets. Hungary delivered its first rate cut since 2024, while Russia, Nigeria, and Thailand also trimmed borrowing costs.

In Latin America, the story has become less about a single EM trade and more focused on individual markets, as local data pulls central banks onto diverging paths.

Mexico's economy, for instance, has shown signs of heating up after last year's sluggishness, reinforcing the central bank's decision to pause its rate-cut cycle.

But Mexico's assets have hit rougher ground lately as investors assess the fallout from Sunday's operation in which Mexican forces killed the country's most wanted cartel leader. The peso was headed for its first weekly drop in four, while stocks were set for modest losses.

The peso MXN= was down 0.5%.

Elsewhere, the Russian rouble RUB= hovered near a one-month low after markets parsed minutes from the central bank's meeting, where officials indicated the odds of additional rate cuts at future meetings had increased.

In frontier markets, Senegal's dollar bonds firmed as the government launched its first public bond offering of the year, aiming to raise 200 billion CFA francs ($362.15 million).

Key Latin American stock indexes and currencies:

(Reporting by Pranav Kashyap in BangaloreEditing by Rod Nickel)

((pranav.kashyap@tr.com; +919886482111;))