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EMERGING MARKETS-Latam assets slide on fears of worsening U.S.-China trade war

By Aaron Saldanha May 23 (Reuters) - Latin American stocks and currencies slid on Thursday, with fears of a worsening U.S.-China trade war in focus as a stern warning China issued to the United States prompted investors to dial back exposure to risky assets.

China said the United States needs to correct its "wrong actions" so trade talks can continue. Globally, trade exposed assets such as copper and oil lost ground, while safe havens like Japan's yen were well supported.

"Trade wars are back on the wires, helping to fuel a correction in risk markets," Mark McCormick, TD Securities' North American head of FX strategy, wrote in a note, adding that "the Chinese appear to be digging in their heels." Latin American markets are broadly exposed to commodities and thereby benefit from solid global growth. They are especially sensitive to a cooling Chinese economy as the country buys a significant chunk of the Latin America's resources.

MSCI's Latin American stocks index dived 1.6%, retreating from a nine-day peak hit on Wednesday. MSCI's Latin American currencies index shed 0.7%, on course to end lower for the first time this week.

Brazil's real weakened 0.4%, while Bovespa-listed stocks dropped 0.8%, weighed on especially heavily by energy stocks and financials.

Common shares and preferred shares of state-run oil firm Petroleo Brasileiro SA (Petrobras) fell 3.3%and 2.7% respectively, following a 3.9% slide in Brent crude futures.

Mexican stocks slid 0.7%, largely on losses among materials stocks, while the peso softened 0.3%.

Consumer price inflation in Latin America's second largest economy was slightly lower than expected in the first half of May, data showed.

Chile's peso softened 0.4%, pressured by lower prices of copper, the country's top export. Stocks slid 0.9%.

Argentina's stocks fell 0.4%, while the country's peso weakened to shed all gains made earlier this week.

Colombia's peso weakened 1%, while stocks fell 1.2%, with state-run oil company Ecopetrol down 2.8%.

Pumping on the Bicentenario and Cano Limon oil pipelines has been halted following bomb attacks in recent days, sources from operators Bicentenario and Ecopetrol said on Wednesday.

Latin American stock indexes and currencies at 1429 GMT Stock indexes Daily % change Latest MSCI Emerging Markets 984.19 -1.38 MSCI LatAm 2576.11 -1.59 Brazil Bovespa 93582.49 -0.82 Mexico IPC 42636.97 -0.71 Chile IPSA 4878.03 -0.87 Argentina MerVal 34436.36 -0.41 Colombia IGBC 12015.13 -1.24 Currencies daily % change Latest Brazil real 4.0549 -0.36 Mexico peso 19.0363 -0.26 Chile peso 699.5 -0.37 Colombia peso 3364.98 -0.93 Peru sol 3.352 -0.33 Argentina peso (interbank) 45.1200 -0.53 (Reporting by Aaron Saldanha in Bengaluru Editing by Marguerita Choy)