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EMERGING MARKETS-Latam assets subdued amid U.S.-China trade fears

(Recasts throughout; updates prices, adds strategist quote) By Aaron Saldanha May 9 (Reuters) - A benchmark Latin American stock index fell on Thursday, while most Latin American currencies softened against the dollar, with investors shifting to safer assets as they awaited new developments in the U.S.-China trade war.

Increased U.S. tariffs on $200 billion worth of Chinese goods are due to kick in on Friday. Trade talks in Washington featuring Chinese Vice Premier Liu He started on Thursday.

MSCI's Latin American stocks benchmark slid 1.7%, while its Latin American currencies index fell 0.9%.

"It seems difficult for the trade talks to avoid a hike in tariffs ... We would expect a further repricing of risk assets, including EMFX," Dirk Willer, head of emerging market strategy at Citi Research, and Kenneth Lam, an emerging markets FX strategist, wrote in a note.

Brazilian equities dropped 0.8%, with financials and energy stocks weighing especially heavily.

Common shares and preferred shares of Petroleo Brasileiro SA (Petrobras) fell 2.9% and 2%, respectively.

Petrobras, which announced lukewarm results on Wednesday, is expected to launch a secondary share offering on May 24, a source said on Thursday.

Retailer Grupo Pao de Acucar tumbled 4.3% on news of its parent, Paris-listed Casino Guichard Perrachon SA , reviewing strategic options in Latin America.

Brazil's real weakened 0.5%. The country's central bank left its key rate at 6.5% on Wednesday, as expected, but its outlook was seen by economists as slightly more dovish.

Mexican stocks fell 0.5%, lower for a thirteenth straight session in their longest losing streak in more than three decades, while the peso softened 0.8%.

President Andres Manuel Lopez Obrador said state oil firm Pemex will oversee a new refinery construction, raising fears about the company's financial health.

Data earlier in the day showed Mexican inflation accelerated to a four-month high in April, restricting the central bank's room to trim interest rates to spur the economy.

Argentina's stocks rose 1%, while the peso softened.

Latin American stock indexes and currencies at 2100 GMT Stock indexes Latest Daily % change MSCI Emerging Markets 1,028.40 -2.14 MSCI LatAm 2,656.11 -1.72 Brazil Bovespa 94,807.85 -0.83 Mexico IPC 43,193.36 -0.5 Chile IPSA 5,045.54 -0.3 Argentina MerVal 34,119.10 1.02 Colombia IGBC 12,576.16 0.37 Currencies daily % change Latest Brazil real 3.9474 0.13 Mexico peso 19.2276 -0.76 Chile peso 684.5 -0.04 Colombia peso 3,274.4 0.52 Peru sol 3.313 0.09 Argentina peso (interbank) 45.2000 -0.11 (Reporting by Aaron Saldanha in Bengaluru, Editing by Rosalba O'Brien)