* Pullback contrasts with optimism in Asia and parts of Europe * Argentine peso weak despite US Treasury's support * Peru's equities set for biggest intraday pct drop since April * LatAm FX down 0.2%, stocks off 1% (Updates with afternoon trading) By Niket Nishant and Purvi Agarwal Oct 21 (Reuters) – Latin American stocks dipped on Tuesday, taking a breather after four straight sessions of gains and currencies also weakened, while Colombian and Argentine assets remained in focus amid political developments. MSCI's index tracking Latin American equities fell 1%, easing from a two-week high hit on Monday. A gauge of regional currencies also slipped 0.2%, as the dollar index strengthened. The pullback stands in contrast to gains elsewhere in emerging markets, as stocks in Asia and parts of Europe advanced, highlighting uneven investor sentiment across regions. Most export-heavy Latin American economies were affected by moves in commodity prices. Sharp declines in gold, silver and copper prices weighed on miners across the region. Stocks in Chile, the world's largest copper exporter, fell 0.5%. Peru's Lima Stock Exchange dropped 3.1%, set for its biggest intraday decline since April, as gold and copper are among its top exports. Meanwhile, Colombia and Argentina remained on investors' radar. Colombia's foreign ministry said a meeting on Monday between President Gustavo Petro, U.S. charge d'affaires John McNamara and Colombia's recalled ambassador to the U.S. Daniel Garcia-Pena was a first step toward healing a rift over drugs and tariffs. The Colombian peso gave up most of its earlier gains to trade flat against the dollar, after recording its steepest one-day fall in over two months on Monday. Equities dipped 0.3%. "The episode (feud with the U.S.) has reinforced perceptions of geopolitical risk at a delicate moment for Colombia's economy— one heavily dependent on trade and remittances from the U.S.," said Felipe Barragan, research strategist at Pepperstone. "Any deterioration in bilateral relations could disrupt key export channels or external funding flows at a time when domestic fundamentals already look stretched." Argentina's stocks fell for the second straight day as the country heads into Sunday's crucial midterm elections. They were last down 1.2%. A strong show of support from the U.S. Treasury, with its $20 billion exchange-rate stabilization agreement with Argentina's central bank, has helped sentiment in the country's assets but the local peso continued to weaken against the dollar. It closed at a record low against the greenback on Monday and was last down 1%, in its sixth consecutive session of declines. "Latin American companies are dealing with both the macro and the micro risk. There are things that they cannot control and are not well-equipped to sort out all the challenges," said David Garcia, co-founder at investment management firm Borderless. Brazil's heavyweight Ibovespa index fell 0.4%, while the real was down 0.2%. The country's environmental agency Ibama greenlit state-run oil company Petrobras to conduct exploratory research by drilling wells in the Foz do Amazonas region, near the mouth of the Amazon river. Separately, Brazil's finance minister said the government plans to send two separate bills with fiscal measures on Tuesday to the Congress, reviving provisions that were previously included in an executive order that expired after lawmakers failed to vote on it. Mexican stocks fell 1.5%, on track to end the third consecutive session in the red. Mining company Industrias Peñoles led the decline. Key Latin American stock indexes and currencies: Latin American market prices from Reuters MSCI Emerging Markets 1382.89 -0.03 MSCI LatAm 2482.57 -1.04 Brazil Bovespa 144006.82 -0.35 Mexico IPC 60747.95 -1.5 Chile IPSA 9114.9 -0.49 Argentina Merval 2002979.2 1.24 Colombia COLCAP 1891.45 -0.31 Brazil real 5.3867 -0.23 Mexico peso 18.4286 -0.26 Chile peso 953.65 -0.31 Colombia peso 3889.5 -0.01 Peru sol 3.3882 -0.5 Argentina peso (interbank) 1490 -1.02 Argentina peso (parallel) 1525 -2.69 (Reporting by Niket Nishant and Purvi Agarwal in Bengaluru, editing by Deepa Babington)
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