EMERGING MARKETS-LatAm assets slip to close out holiday-shortened week

By Pranav Kashyap

April 2 (Reuters) - Most Latin American assets retreated broadly on Thursday after U.S. President Donald Trump dashed hopes for greater clarity on how long the Middle East conflict might last, reviving investor unease across emerging markets.

A gauge tracking regional equities .MILA00000PUS fell 0.4%. Even so, the index remained on course for its strongest weekly performance since mid-January.

The equivalent index for regional currencies .MILA00000CUS slipped 0.1%, though it too was still heading for its best week since mid-January.

Markets in Mexico, Argentina, Venezuela, Peru and Colombia were closed for a local holiday, leaving volumes thin.

In a potentially significant development, the U.S. on Wednesday lifted sanctions against Venezuelan interim President Delcy Rodriguez, a move that could pave the way for renewed foreign capital inflows through sanctions waivers.

The Caracas benchmark stock index .IBC was up more than 200% year-to-date.

Meanwhile, stocks in Sao Paulo .BVSP slipped 0.4%. Data showed industrial production rose 0.9% in February, beating the median estimate in a Reuters poll which projected an increase of 0.7%.

Elsewhere in the emerging market universe, Turkish equities edged higher .XU100 as investors absorbed news of a nearly 120-tonne decline in the central bank's gold reserves over the past two weeks, reflecting efforts by authorities to cushion markets from the fallout of the Iran war.

In a prime-time address, Trump said the U.S. would strike Iran "extremely hard" within weeks -- a marked departure from the earlier tone struck by both him and Secretary of State Marco Rubio.

That rhetorical shift left investors once again mired in uncertainty over how - and when - the conflict might reach its conclusion.

"Despite attempts to frame the situation as manageable and short-lived, the tone of the speech was more consistent with a war rally, reinforcing the likelihood of further escalation rather than resolution," said Daniela Hathorn, senior market analyst, Capital.com.

However, Iran is drafting a protocol with Oman to monitor traffic in the Strait of Hormuz, its foreign ministry official said. A potential reopening of the strait could ease concerns about oil supplies.

Separately, India's rupee INR=IN stood out as a rare bright spot, closing near a two-week high and recording its strongest daily gain since September 2013 after the central bank moved decisively to curb speculative bets against the currency.

The Reserve Bank of India barred banks from offering rupee non-deliverable forwards to both resident and non-resident clients, while also ruling that companies would no longer be allowed to rebook canceled forward contracts.

The measures came on the heels of tighter restrictions on banks' foreign-exchange positions in the onshore market. Stocks in Mumbai .BSESN sharply reversed earlier losses to end the session 0.2% higher.