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EMERGING MARKETS-Latam FX subdued, Colombia stocks gain after Saudi attacks

By Agamoni Ghosh

(Updates prices) By Agamoni Ghosh Sept 16 (Reuters) - A surge in crude prices in the wake of attacks on Saudi Arabia's oil facilities drew muted reaction from Latin American currencies on Monday, while gains in oil producers supported Colombia's stock markets. Oil prices surged nearly 20% at one point on Monday after the attack in Saudi Arabia, the world's biggest oil exporter, halved the kingdom's production. But prices came off their peaks after President Donald Trump authorized the use of the U.S. emergency stockpile to ensure stable supply, helping the dollar climb against a basket of major currencies. Trump also said the United States was "locked and loaded" for a potential response to the strikes, and that Iran appeared responsible, however, raising tensions. While currencies of some oil-exporters benefit from the steep rise in oil prices, concerns that an oil supply shock and geopolitical tensions would damage an already fragile global economy sapped investor demand for riskier assets. "The jump in oil prices in this case is not stemming from economic growth factors for exporters but from geopolitical tensions which has a certain risk sentiment attached to it," said Cristian Maggio, head of emerging markets strategy at TD Securities. The Brazilian real and the Mexican peso edged lower, while Chile's peso fell 0.2% after weak Chinese data fueled worries about demand for copper. Colombia's peso shed early gains to trade flat as the dollar firmed. Stock indices in the region were mixed with Brazil's Bovespa down 0.35%. Shares in state-controlled oil firm Petrobras jumped more than 3% as oil prices rallied, while airlines, including Azul SA and Gol Linhas Aereas Inteligentes, slumped more than 7% on concerns of rising fuel costs. Colombia's main stock index jumped more than 1%, helped by shares of oil firm Ecopetrol SA. Oil is a main export for Latin America's fourth-largest economy. Stock markets in Mexico were shut for a local holiday. Latin American stock indexes and currencies at 1957 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1025.81 -0.08 MSCI LatAm 2694.18 -0.56 Brazil Bovespa 103187.63 -0.3 Mexico IPC - - Chile IPSA 5069.68 1.3 Argentina MerVal 30447.41 1.032 Colombia IGBC 13006.57 1.36 Currencies Latest Daily % change Brazil real 4.0891 -0.13 Mexico peso 19.4399 -0.14 Chile peso 709.3 -0.20 Colombia peso 3362.48 -0.03 Peru sol 3.333 -0.36 Argentina peso (interbank) 56.2600 -0.20 (Reporting by Agamoni Ghosh and Sruthi Shankar in Bengaluru Editing by Sonya Hepinstall)