* Walmex rises on expected earnings report after bell
* Chile holiday, Tuesday holiday in Brazil
* Mexico's IPC gains 0.40 percent, Bovespa up 0.23 percent (Updates to afternoon)
By Luciana Lopez and Caroline Stauffer
SAO PAULO/MEXICO CITY, Oct 11 (Reuters) - Latin American stocks gained in afternoon trading on Monday on hopes the U.S. Federal Reserve would add stimulus to the world's largest economy, as global holidays resulted in weak volume.
The MSCI Latin American stocks index <.MILA00000PUS> rose 1.06 percent after having climbed 1.02 percent in the previous session.
But a holiday in Chile closed markets in Santiago and many Brazilians stayed home ahead of a national holiday on Tuesday.
Markets have increasingly bet that the Fed will step in and try to boost the U.S. economy, which has seen sluggish growth even as many emerging markets boom. Money pumped into the U.S. economy could find its way to higher-yielding emerging market assets.
However, a war of words over global currencies has tempered some of that optimism, stoking uncertainty. Many governments, including that of Brazil, have tried to weaken their currencies recently to help struggling exporters.
"The prospect of the Federal Reserve acting is positive and continues to drive the market, but the lack of an agreement on currency imbalances over the weekend is negative," said Juan Jose Resendiz, head of analysis at brokerage Arka in Mexico City.
"With countries fighting to devalue their currencies to try and protect their exports, this could limit market gains," he said.
Markets in Brazil were likely to see low volumes and few large movements on Monday, said Luciano Rostagno, chief strategist for CM Capital Markets in Sao Paulo, with equities remaining nearly unchanged ahead of the holiday closure.
Brazil's benchmark Bovespa index <.BVSP> rose 0.23 percent in the afternoon, building on Friday's advance.
Exchange operator BM&FBovespa
Limiting gains, developers Gafisa
Mexico's IPC index <.MXX> added 0.40 percent. The index closed at a record high on Friday.
Shares of leading retailer Walmex
"We estimate that according to the month-on-month sales they've reported, they could register growth of about 28 percent with respect to the same period of 2009. However, profits could be growing around 22 percent," MetAnalisis analysts wrote to clients.
Trading in Mexican homebuilder Geo
The stock resumed trading shortly later, up 3.45 percent.
Shares of telecom giant America Movil
Cemex, the world's No. 3 cement maker
The company said on Friday it will buy the assets of its U.S. joint venture partner Ready Mix USA, for about $360 million.
Monterrey-based Cemex said it will take on $17 million in net debt once the transaction closes next September. [ID:nN08243034] (Additional reporting by Lizbeth Salazar in Mexico City; Editing by Dan Grebler)