EMERGING MARKETS-Latin American assets drop on economic fears

* LatAm stocks, currencies fall following global markets

* Drop in commodities hurts LatAm markets

* Emerging market gains on China stimulus short-lived (Updates to close)

By Manuela Badawy

NEW YORK, Nov 11 (Reuters) - Latin American equities and currencies fell on Tuesday on the back of weak commodity prices and widespread market fears the global economic downturn is worsening.

Latin American markets could not hold gains from news of Monday's announcement of an economic stimulus package in China of nearly $600 billion that would target infrastructure and include softer monetary conditions.

The stimulus package should have supported Latin American commodity export markets as it is likely to be a guarantee of continued consumption of oil and copper, key exports for the region.

"We would have expected more fireworks to go off, both in LatAm and U.S. markets, on the back of the Chinese stimulus news, but this was not to be," said Enrique Alvarez, head of Latin American debt strategy at IDEAglobal in New York.

"What we witnessed in the financial markets, particularly on the U.S. side, implied renewed uneasiness on financials, which has been the repetitive precursor to bouts of stress in recent months," he added.

With oil trading at 20-month lows below $60 a barrel CLc1 and copper prices falling 5 percent, investors fear that domestic demand in China is cooling.

Chinese import growth slowed in October and inflation fell to a 17-month low, making it likely that Beijing will cut interest rates soon. For details, see: [nSP418906]

Latin American stocks felt the brunt of investor flight from risky assets, with the Morgan Stanley Capital International's Latin American stock index .MILA00000PUS falling 2.84 percent while the MSCI emerging markets stock index .MSCIEF dropped 4.7 percent.

Brazil's Bovespa index .BVSP fell as much as 2.3 percent earlier in the day, but reversed losses to end 1.32 percent higher, boosted by energy and telecom shares.

Mexico's IPC index .MXX shed 1.13 percent amid fears the weak U.S. economy could push Mexico into recession as well.

Argentina's MerVal index .MERV dropped 1.74 percent. Chile's blue-chip stocks .IPSA traded down 1.8 percent while its all-market IGPA index .IGPA shed 1.33 percent on weak commodity prices.

Colombia's IGBC stock index .IGBC lost 0.73 percent and Peru's stock exchange .IGRA plunged 3.71 percent on the drop of copper prices.