EMERGING MARKETS-Latin American markets drop as US-Iran tensions escalate

By Johann M Cherian and Twesha Dikshit

April 23 (Reuters) - Most Latin American currencies and stocks declined on Thursday, after reports of air defense systems engaging with "hostile targets" in parts of Tehran drove oil prices higher and called into question the fragile ceasefire between the United States and Iran.

MSCI's index tracking Latam equities .MILA000000PUS fell 1.5% to an over two-week low, with benchmark indexes in Brazil .BVSP and Argentina .MERV down 0.7% and 2.2%, respectively.

A parallel gauge tracking currencies .MILA00000CUS fell 0.7% against the dollar, with energy producer Brazil's real BRL=, Argentina's peso ARS=RASL and energy-dependent Chile's peso CLP= off 0.9% each.

Crude prices jumped to about $105 a barrel as Iran showed off its tightened grip over the strait with video of its commandos storming a huge cargo ship following the collapse of peace talks that Washington had hoped would open the important shipping corridor.

"My view is that Latin America will likely outperform EM and possibly some DM markets as well, given this latest oil price shock," said Juan Egana, Latin America Strategist at BCA Research.

"Countries like Brazil, Colombia, and even Mexico to a certain extent, which is a net oil importer but still exports some oil, stocks in these countries will fall by less than in the rest of EM."

JITTERS IN PERU

Uncertainties regarding the future governance of Peru have weighed on the copper producer's assets, following allegations of fraud during the recent general election that have triggered a vote recount that extends until May.

The sol PEN= slipped 0.7% and is down 3.1% for the year, underperforming peers in the region, while MSCI's gauge for domestic stocks .MIPE00000PUS slid 2.7%, and is now down almost 5% this week.

"Political uncertainty (in Peru) primarily affects FX and local assets in the short term, through volatility and a higher risk premium, rather than triggering deep concerns over debt sustainability or creditworthiness," said Viktor Szabó, investment director in emerging market debt at Aberdeen Investments.

"Until political clarity improves, however, investors are likely to remain cautious."

Internal disputes over defense purchases from the U.S. triggered the resignation of two ministers within the Peruvian government. However, the government finally made a $462 million payment for U.S. F-16 fighter jets, the first installment in a multi-billion-dollar deal.

Colombia's peso COP= was flat. The oil exporter is gearing up for elections next month, ahead of which the country's autonomous fiscal rule committee said the next government must cut spending by 4% of gross domestic product to avoid a debt default.

Mexico's 12-month inflation stood at 4.53% in the first half of April, above expectations, but declining from the previous month. The figures did little to clarify the central bank's next policy move.

The local benchmark share index .MXX ticked down 0.3%, with Cemex CEMEXCPO.MX climbing 7.1% after reporting record first-quarter core earnings.

The International Monetary Fund said it unlocked an immediate disbursement of about $400 million for Ecuador following a review of the country. The country's hard-currency bonds EC221423780=RRPS, EC221423780= were subdued.

Key Latin American stock indexes and currencies at 20:18 GMT: