* MSCI LatAM FX down 0.1%, stocks down 1%

* Gulf CDS edge higher after UAE breaks from OPEC, OPEC+

* Chile cenbank expected to leave interest rates steady

* Brazil inflation accelerates less than expected in

April

(Updates to mid-session trading)

By Purvi Agarwal and Johann M Cherian

April 28 (Reuters) - Most Latin American stocks and

currencies inched lower on Tuesday, as investors assessed

developments in the Middle East where progress on an Iran peace

deal stalled and the United Arab Emirates quit OPEC and OPEC+.

The UAE said it was quitting the oil-exporting groups, a

move the country's energy minister said was taken after a look

at energy strategies.

The move comes as the U.S.-Israeli war on Iran has damaged

energy infrastructure in the Middle East and choked energy

shipping through the crucial Strait of Hormuz, pressuring

economies in the region that depend on oil rents.

The conflict has also clouded prospects of global economic

growth as countries prepare to tackle the inflationary fallout

of the war.

"The departure of a top oil producer in OPEC affects the

organization's ability to influence global oil supply over the

long-run and could increase market volatility," said Kenny Zhu,

AVP, energy & commodities research at Global X.

"The exit may also shift market share toward Western

producers like the U.S. and Canada, who have grown their output

significantly over recent years."

Dubai stocks closed 0.2% lower on Tuesday ahead of

the announcement, while hard-currency bonds were marginally

lower.

Jitters were felt across the region as investors sought

protection via credit default swaps on Gulf sovereign debt.

Five-year credit default swaps (CDS) for Bahrain surged 7.1

basis points to 251.6, according to Markit data, while those for

UAE and Saudi Arabia rose 1 and 0.5 bps, respectively.

Progress on U.S.-Iran peace talks stalled after a U.S.

official said President Donald Trump was unhappy with the latest

Iranian proposal to end the two-month war.

Back in Latin America, most currencies weakened against the

dollar, with the MSCI gauge down 0.1%.

Colombia's peso was choppy and was last up 0.7%. The

currency logged its sharpest one-day decline since April 2025 on

Monday after presidential race polls over the weekend showed the

left-wing coalition was in the lead, signaling policy

continuity.

The country's fiscal accounts have come under pressure as a

result of a surge in government spending. Local stocks

lost 1.3%.

Chile's peso firmed 0.6%, while its stocks

shed 1.8%. The country's central bank is scheduled to announce

its monetary policy decision later in the day, with markets

widely expecting rates left on hold.

Brazil's real was flat after data showed inflation

accelerated less than expected in early April despite a jump in

fuel and food prices, reinforcing market expectations of an

interest rate cut this week.

Mexico's peso dipped. Focus is on developments around

the upcoming USMCA free trade negotiation next month.

Against this backdrop, a report said foreign automakers have

warned the Trump administration that they could pull their

cheapest car models from the U.S. market if the agreement is not

renewed or is watered down.

MSCI's gauge of regional stocks was down 1%,

with bourses in most major markets such as Brazil,

Mexico and Chile in the red.

Investors also kept an eye on electoral developments in Peru

as vote counting continued amid allegations of electoral fraud.

A runoff between market-friendly Keiko Fujimori and leftist

Roberto Sanchez is anticipated in June.

MSCI's gauge for local stocks fell 2.6%,

while the sol slipped 0.2%.

Latin American market

prices from Reuters

MSCI Emerging Markets 1617.54 -0.76

MSCI LatAm 3194.09 -0.97

Brazil Bovespa 188417.49 -0.61

Mexico IPC 67344.49 -0.95

Chile IPSA 10933.13 -1.77

Argentina Merval 2875483.5 0.322

7

Colombia COLCAP 2160.23 -1.35

Brazil real 4.9787 0.08

Mexico peso 17.3868 -0.06

Chile peso 888.76 0.61

Colombia peso 3600.04 0.74

Peru sol 3.5124 -0.2

Argentina peso (interbank) 1404.5 0.89

Argentina peso (parallel) 1410 1.42