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Iran fires missiles at US airbase in Qatar

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Mexican economy grew 0.5% in April, retail sales fell

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Latam FX flat, stocks off 0.6%

(Updates with mid-session prices)

By Purvi Agarwal and Pranav Kashyap

June 23 (Reuters) - Latin American stocks tumbled on

Monday as markets reeled from Iran's retaliation to U.S.-Israeli

strikes on its nuclear sites over the weekend, though regional

currencies largely held their ground against a weakening dollar.

Iran's military unleashed a "devastating and powerful"

missile barrage on the Al Udeid U.S. airbase in Qatar, marking a

response to U.S.-Israeli strikes on its nuclear sites over the

weekend.

Tehran's threat of retaliation quickly became reality,

prompting Qatar to shut down its airspace, while FlightRadar

said that neighboring UAE also closed its skies, according to

flight paths and air traffic control audio.

Stock markets across the Middle East were mixed. Israeli

stocks closed down 1.3% but were hovering around record

highs. The index snapped a six-session winning streak.

Stocks in Turkey closed 0.6% lower, while ones in

Saudi Arabia ended 1.3% higher. Stocks in Dubai

gained 1.1%.

Israel's shekel strengthened 1% against the dollar,

while the nation's international bonds rose over one cent to the

dollar.

Turkey's lira gave up its earlier losses and was

last up marginally - just off its lowest since March 19.

The U.S. dollar was down 0.5%, reversing gains from

earlier in the day, and limiting the fall in emerging market

currencies.

"Even if there are increased tensions and volatility in

the near-term, the historical lessons of Middle East news noise

for markets is abundantly clear - the beat always goes on," said

David Bahnsen, chief investment officer, The Bahnsen Group.

MSCI's index of Latin American for stocks

dropped 0.6%, while a gauge for currencies was

flat.

The heightened tensions sent shockwaves through regional

markets. Argentina's Merval index plunged 4.3%, hitting

its lowest point in over two months, while Brazil's benchmark

fell 0.6% and Mexican stocks fell 0.3%, hovering

at over one-month lows.

Brazil's real ticked up 0.1%, while the Mexican peso

was steady.

Mexico is due an interest rate decision this week, where the

central bank is widely expected to cut its key interest rate by

half a percentage point.

Data on the day showed the Mexican economy grew 0.5% in

April from March while retail sales fell 1% in April.

Chile's peso fell 0.9%, despite a slight uptick in

copper prices.

Amid the turmoil, Iranian lawmakers reportedly approved a

measure to close the Strait of Hormuz -- vital artery for

global oil shipments -- pending final sign-off from the

country's top security council.

The prospect of a shutdown kept investors on edge, but with

no immediate disruption to tanker traffic in the wake of Iran's

retaliation, oil prices tumbled 4%.

"We haven't seen the closing of the Strait and that gives

some support," said Andres Abadia, chief Latin America

economist at Pantheon Macroeconomics.

Meanwhile, the Colombian peso fell 0.2%, in-line with

broader market declines.

However, Latam assets have had a good year so far,

benefiting from a shift out of U.S. assets and limited impact

from U.S. tariffs.

The Argentine peso slipped 0.4% as new data revealed

the economy grew by 5.8%-falling short of the 6.1% expansion

forecast in a Reuters poll.

Key Latin American stock indexes and currencies:

MSCI Emerging Markets 1184.91 -0.42

MSCI LatAm 2251.14 -0.59

Brazil Bovespa 136229.29 -0.65

Mexico IPC 56083.35 -0.32

Argentina Merval 1974512.5 -4.34

2

Chile IPSA 8011.63 -0.82

Colombia COLCAP 1647.78 -0.32

Brazil real 5.5052 0.14

Mexico peso 19.1459 0.04

Chile peso 948 -0.89

Colombia peso 4083 -0.22

Peru sol 3.59 0.28

Argentina peso (interbank) 1171 -0.43

Argentina peso (parallel) 1190 0.84