Latin American stock indices were subdued on Wednesday as a re-emergence of trade tensions between the United States and China kept investors on the sidelines, but a recovery in oil prices and a soft dollar lifted currencies in the region.

MSCI's index of Latin American stocks fell 0.1% with heavy-weights Brazil and Mexico stocks making marginal moves.

Sao Paulo-traded stocks flitted between positive and negative territory, while the real currency inched 0.2% higher as investors looked for more policy directions beyond the pension reforms.

Brazilian President Jair Bolsonaro's administration, which has been looking to bring the country's fiscal deficit situation under control, said it was planning to unveil a stimulus package worth 63 billion reais ($16.8 billion), according to newspaper Valor Economico.

What the package will entail and how much it will add to government's savings over and above the 900 billion reais ($240.10 billion) expected from the pension reform is not known yet.

Mexican stocks slid 0.2% but telecom operator America Movil rose 3% after a surge in its second-quarter net profit on the back of foreign exchange gains.

The peso which took a hit in the previous session after the government's new Pemex plan failed to impress investors managed to partly recover, moving 0.3% higher.

"The markets are still giving it some benefit of the doubt at the moment but that could evaporate real soon," said Christian Lawrence, senior strategist, Latam FX, Rabobank.

"There is really not much to be optimistic about the plan given the task at hand is huge and doesn't seem this plan will change anything for Pemex."

Pemex, the world's most indebted oil company was downgraded by Fitch to speculative, or "junk," earlier this year while Moody's puts it at just one notch higher. A downgrade from Moody's would formally confirm Pemex as a junk credit.

The Chilean peso and Colombian peso moved higher between 0.2% and 0.4%, while the Argentinian peso outperformed its Latin American peers.