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LatAm stocks down 1.1%, FX down 0.3%

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Chile's September copper exports down 2% at $4.39 billion

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Colombian inflation data later in the day

(Updates with afternoon prices, analyst comment)

By Nikhil Sharma and Pranav Kashyap

Oct 7 (Reuters) -

Latin American currencies slipped on Tuesday, dragged down

by a firmer dollar, with Brazil's real leading the retreat as

investors braced for key inflation data across the region.

Brazil's real fell 0.7%, heading for its sharpest

drop in two weeks after inflation data showed the IGP-DI index

rose 0.36% in September, missing forecasts. Brazil's benchmark

Bovespa index tumbled 1.5% to a one-month low, on track

for its worst single-day fall in nearly two months if losses

hold.

Investors are now eyeing

Thursday's IPCA print

- a key inflation gauge - for signs of mounting price

pressures.

Meanwhile,

trade relations

were in focus after a call between Presidents Luiz Inacio

Lula da Silva and Donald Trump hinted at a potential in-person

meeting to resolve disputes.

"While Lula and Trump don't seem to get along, they found

like a way of dealing with each other that's mutually

acceptable. So we don't really think that there will be a lot of

drama with respect to Brazil looking forward," Philip Meier,

deputy chief investment officer at Gramercy Funds Management,

said.

The World Bank lifted its growth estimate for Latin America

and the Caribbean next year, though the region remains the

world's slowest-growing due to stubborn inflation, high debt,

and rising uncertainties due to U.S. tariff policies.

Brazil's estimate for 2025 remained at 2.4%, with expansion

seen decelerating to 2.2% next year. Mexico's economy is now

expected to grow 0.5% this year, up from June's 0.2% forecast,

with growth accelerating to 1.4% next year.

A gauge of the region's equities fell 1.1%

to a near one-month low but has grown about 33% this year,

indicating investors' hunt for better returns in territories

beyond the developed markets.

The Aberdeen House View said it expects EM equities to

continue performing well, citing cheaper valuations and support

from a weaker dollar.

"Generally speaking, EM is a sought after again ... We are

in a world where people want to diversify away from the U.S.

dollar, away from U.S. assets and EM will benefit," Meier added.

Mexican stocks were flat, while the local peso

slipped 0.3% ahead of the country's crucial inflation data later

this week.

In Chile, the currency firmed 0.3% and the Santiago

stock index edged down 0.2%. The world's largest

copper producer, Chile, saw its red metal exports fall 2.03% in

September to $4.39 billion on a year-over-year basis.

The Colombian peso dipped 0.4% and equities

fell 0.2% ahead of the day's inflation data.

In Argentina, the peso was stable, while the main

equity index lost 0.5% as investors approached the

October 26 midterms, where President Javier Milei will aim to

stage a comeback after last month's bruising defeat in

provincial elections.

Elsewhere, the Israeli shekel eased, pulling back

from a three-year high hit in the previous session, while the

country's international dollar bonds firmed as the country

marked two years after the Gaza conflict erupted. Trump pledged

support for Gaza security guarantees and signaled that a deal to

free the remaining hostages may be near.

Key Latin American stock indexes and currencies:

MSCI Emerging Markets 1372.93 0.05

MSCI LatAm 2462.06 -1.04

Brazil Bovespa 141443.93 -1.51

Mexico IPC 60382.12 -0.04

Argentina Merval 1793532.5 -0.501

5

Chile IPSA 8828.93 -0.04

Colombia COLCAP 1859.61 -0.19

Brazil real 5.3471 -0.65

Mexico peso 18.3839 -0.27

Chile peso 959.1 0.23

Colombia peso 3873.7 -0.4

Peru sol 3.4406 0.53

Argentina peso (interbank) 1429.5 0.03

Argentina peso (parallel) 1440 0.69