EMERGING MARKETS-LatAm stocks slip as dollar strength dents risk appetite; FX mixed

By Utkarsh Hathi

Sept 29 (Reuters) - Most Latin American stocks fell on Tuesday, while currencies were mixed after sharp declines in the previous session, as a stronger US dollar and rising Treasury yields outweighed support from firmer metal prices.

Brent crude futures retreated 0.7%, surrendering early gains, after Saudi Arabia resumed loading oil from its Red Sea port of Yanbu, easing immediate concerns over energy supplies. O/R

Even so, the US dollar was firm at a two-month high, as oil remained above $100 a barrel, with elevated Treasury yields providing additional support.

MSCI's index tracking Latin American currencies .MILA00000CUS edged 0.37% lower to its lowest since July 9, while its stocks equivalent .MILA00000PUS fell 0.36%.

Brazilian mining giant Vale VALE3.SA fell 2%, pressured by weaker iron ore prices, while energy firm Petrobras fell 0.5%, in tandem with a dip in crude prices.

Brazil's benchmark Ibovespa index .BVSP slipped 0.36%, while the high-yielding real was little changed after sharp losses in the previous session.

Loan defaults in the region's largest economy hit a record high in August, central bank data showed on Tuesday.

Separately, the government posted a primary deficit of 13.585 billion reais in August, narrower than the 14.40 billion reais expected by economists in a Reuters poll.

Concerns over Brazil's public finances and rising living costs remain in focus ahead of Sunday's first-round voting for the presidential election, with incumbent President Luiz Inacio Lula da Silva in a tight race with Senator Flavio Bolsonaro.

"If Brazil can show a focus on reining in that spending, under either a Bolsonaro or a Lula victory, it would be a welcome by the market," said Rohit Chopra, portfolio manager at Lazard Asset Management.

Fiscal concerns are also intensifying in Colombia, where sources said authorities have held talks with the International Monetary Fund in recent weeks on possible financing. The country's fiscal challenges have deepened following the recent earthquake.

The Colombian peso rose 1%. The currency has given up some of its gains in recent weeks, which were driven by strong momentum following President Abelardo De La Espriella's election victory in June.

Investors are also awaiting the Colombian central bank's rate decision later this week, with policymakers expected to leave borrowing costs unchanged.

The Mexican peso was subdued after hitting a six-month low in the previous session, while its stocks .MXX gained 0.2%.

Peru's benchmark stock index .MXNUAMPESCPGPE rose 0.26%, supported by gold prices, which recovered after hitting a seven-week low on Monday.

Key Latin American stock indexes and currencies at 1503 GMT