EMERGING MARKETS-Geopolitical tensions weigh on Latam markets, Chile peso outperforms

 (Updates prices)
    By Susan Mathew
    Jan 7 (Reuters) - Latin American stocks weakened on Tuesday
because of lingering uncertainty around a standoff between the
United States and Iran, while Chile's peso outperformed
following a sharp sell-off in the previous session.
    Regional stock indices fell between 0.2% and 0.9%. Brazil
stocks posted their fifth losing session in six. An index of
global stocks traded flat with the Dow Jones
index and the S&P 500 declining.
    The killing of a top Iranian general by the United States on
Friday has made investors cautious as they wait to see how this
latest dent in Washington-Tehran relations would play out as
Iran vowed retaliation. 
    "Local assets are being driven by external drivers,
specifically the uptick in geopolitical risk and a stronger
dollar," said Gustavo Rangel, chief economist, LATAM at ING New
    The dollar gained momentum as a rally in the Japanese yen
and the Swiss franc - safe havens that have been favored since
the rise in U.S.-Iran tensions - faded, while
better-than-expected U.S. non-manufacturing sector and factory
orders data provided an additional boost.
    Brazil's real and Mexico's peso traded flat,
while Colombia's peso, sensitive to oil prices on account
of being an exporter, fell half a percent for its biggest
one-day fall in six weeks, as crude prices slipped. 
    The Chilean peso, meanwhile, firmed 0.4% after two
days of heavy losses. The currency lost almost 3% thanks in part
to a fall in copper prices on Monday and as the central bank
suspended intervention into the foreign exchange market this
    Chile's central bank had set up foreign currency
interventions that were to last until May 2020 after the peso
hit an all-time low in November following violent protests over
    Copper prices also tend to have significant sway on the peso
as the base metal is Chile's largest export. 
    On Tuesday, the state copper agency said output slumped at
state miner Codelco and BHP's sprawling Escondida mine in
November amid riots. Copper prices on the London's Metals
Exchange closed higher.
    Chile's central bank said export revenue crept up in
December, despite a fall in the value of copper shipments. The
head of Chile's mining trade union on Tuesday said copper price
is unlikely to rebound in 2020 even if trade tensions between
the United States and China subside.
    Santiago's IPSA stock index rose 0.6% to its
highest in more than two months.
    Latin American stock indexes and currencies at 1931 GMT:
    Stock indexes             Latest    Daily %
 MSCI Emerging Markets         1116.59      0.36
 MSCI LatAm                    2929.11     -0.65
 Brazil Bovespa              116696.55     -0.16
 Mexico IPC                   44106.05     -0.87
 Chile IPSA                    4913.52       0.6
 Argentina MerVal             41140.16    -0.795
 Colombia COLCAP               1665.05     -0.68
       Currencies             Latest    Daily %
 Brazil real                    4.0610      0.06
 Mexico peso                   18.8700     -0.17
 Chile peso                      768.8      0.48
 Colombia peso                    3261     -0.51
 Peru sol                        3.321      0.09
 Argentine peso                 59.730     -0.16
 (Reporting by Susan Mathew in Bengaluru; editing by Grant