EMERGING MARKETS-Latam stocks higher, currencies mixed as investors assess US-Iran peace hopes, await economic data

By Utkarsh Hathi and Purvi Agarwal

Sept 21 (Reuters) - Latin American equities were broadly higher on Monday, swept up in a global risk-on wave, while currencies were mixed, as investors weighed hopes of diplomatic progress in the Iran conflict and awaited economic data due later this week.

Most of the region's currencies were flat or higher after a tough week where a stronger dollar following the US Federal Reserve's interest rate hike, political uncertainty in Brazil ahead of next month's elections and concerns over Colombia's public finances dampened investor sentiment.

US President Donald Trump said he was open to meeting his Iranian counterpart on the sidelines of the UN General Assembly this week, rekindling hopes that US and Iran could return to the negotiating table.

Oil prices slipped to $100 a barrel, their lowest in 11 days, as traders eyed a partial recovery in shipments from Saudi Arabia, lifting risk appetite across the globe. O/R

"(The meeting) could generate market-moving headlines surrounding the Iran war, Middle East security, Russia-Ukraine and potential efforts to stabilize global energy supplies," said Jay Woods, chief market strategist at Freedom Capital Markets.

"Signs of diplomacy could ease oil prices and inflation fears."

MSCI's index tracking LatAm equities .MILA00000PUS rose 1.4%, while its currency equivalent .MILA00000CUS gained 0.8%. The latter was poised for its sharpest one-day rise since July 30.

In Brazil, a BTG Pactual/Nexus poll showed on Monday that President Luiz Inacio Lula da Silva and right wing Senator Flavio Bolsonaro remain tied, with the leftist incumbent holding a narrow lead within the survey's margin of error.

The real edged 0.7% higher, while the Brazilian benchmark index .BVSP rose 0.9%.

Bank of America Global Research's Latin America fund manager survey showed that only one-third of participants would be willing to add to Brazilian equities at current levels, despite expectations the Ibovespa would top 180,000 points this year.

"The next president will choose the direction of economic policy, but Congress and fiscal arithmetic will determine how far that agenda can travel," said BofA Global Research economists in a note.

Meanwhile, Lula said Brazil did not intend to use its reciprocity law against the US over tariffs imposed by Washington as negotiations continue.

Brazil's September mid-month inflation figures are expected later this week. The central bank delivered a 25-basis-point rate cut last week, with private-sector economists polled weekly by the bank expecting an additional quarter-point rate cut at the end of 2026.

The Mexican peso was flat. The central bank of Mexico is widely expected hold rates unchanged on Thursday.

Equities in Mexico .MXX reversed course to gain 0.2%.

Chile's peso appreciated 1.2%, the most among peers, as copper prices gained 1%. It was on track for its biggest one-day jump in over a month.

Key Latin American stock indexes and currencies: