The region's major copper exporter, Chile, saw its currency ease 0.7%, as copper prices fell on Tuesday. Central bank data showed the Andean economy was flat in the second quarter from the previous quarter, missing market expectations.
Brazil's Bovespa was flat, while the real fell 0.3%. Colombia's peso gained 1.3%, while the COLCAP equity index was also little changed.
Colombia's economy grew 3.5% in the second quarter from a year earlier and expanded 1.3% from the previous quarter.
Investors were also assessing the fallout from last week's 7.4-magnitude earthquake, which struck major urban and commercial areas in the west and could result in insured losses in the low- to mid-single-digit billions of dollars, according to Gallagher Re.
Regional equities and currencies mixed
The renewed tensions have pushed geopolitical risk back to the forefront for investors, with implications for oil, bonds, currencies and equities.
They have also interrupted a recent period of calmer trading, when softer U.S. data had eased concerns about further Federal Reserve tightening and revived demand for emerging-market assets.
The MSCI Latin America equities index was down 0.6%, while a regional currency gauge edged 0.2% lower.
Latin American equities, with their heavy exposure to commodity-linked companies, have recently underperformed broader emerging markets as investors favored Asian technology stocks, seen as the biggest beneficiaries of the resurgent interest in AI-related names.
Latin American assets decline as oil and yields rise
Most Latin American stocks and currencies were lower on Tuesday as renewed Middle East tensions kept investors cautious, lifting oil prices and pushing global borrowing costs higher.
Brent crude reached its highest level since late last month after fresh signals from Washington and Tehran ruled out the possibility of a near term end to the conflict. The rise in energy prices added to inflation concerns at a time when long-dated bond markets were already under strain. The yield on the 30-year U.S. Treasury bond, a benchmark for global borrowing costs, rose to its highest level since June 2007.
“Persistent Middle East tensions are keeping crude elevated, adding another supply-driven inflation risk to already stretched long-end markets,” said Geoffrey Yu, an analyst at BNY.
“The burden increasingly falls on governments to convince bondholders that current yields offer enough compensation.”
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