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EMERGING MARKETS-Latam joins broader EM sell-off as growth, political worries sap risk appetite

By Susan Mathew July 5 (Reuters) - Emerging market currencies were battered on Tuesday as the dollar reigned supreme, and a gauge of eastern European stocks slumped to an all-time low after a surge in European gas prices heightened global recession worries. MSCI's index of emerging market currencies hit 20-month lows with resource-rich Latin America's currencies joining the sell-off. Crude exporter Colombia's peso hit an all-time low of 4,253.60, while top copper producer Chile's peso slumped to new lows of 946.20-a-dollar hit by falling prices of oil and the red metal respectively. Mexico's peso and Brazil's real slumped 1.3% with the latter hitting five-month lows as May industrial output rose less than expected. European gas prices surged after flows from Russia dipped and strikes at Norwegian oil and gas infrastructure added to concerns over supply, exacerbating fears over spiralling inflation and slowing economic growth. "Slowdown fears are now arguably the main driver of currencies globally, perhaps even more so than central bank interest rate expectations," said Matthew Ryan, head of market strategy at global financial services firm Ebury. Central and eastern European currencies tumbled against the dollar which surged as the euro tanked, while MSCI's index of eastern European stocks dropped 4.8% - their worst session since early March. The broader emerging market stocks index extended losses to a fifth straight session. After having hit 50 per dollar last week, Russia's rouble tumbled to around 61 per dollar, while Turkey's lira weakened more than 1%. PINK TIDE WORRIES Argentina's official peso gave up another 0.2% after a turbulent Monday when investors fretted over policy implications after Silvina Batakis, widely viewed as close to the hard left-wing of the ruling Peronist coalition, was appointed as the new economy minister. The country's popular black market peso had dropped about 8% on Monday. Argentina is a top global exporter of soybeans, corn and wheat, and farm sector leaders in the country said they were worried about Batakis' close ties with Vice President Cristina Fernandez de Kirchner who pushed higher export taxes on agricultural goods when she was president from 2007-2015. Latam bankers expect a drop in M&A and equity deals to intensify through the end of the year as Brazil goes through its presidential elections in October with leftist former President Luiz Inacio Lula da Silva ahead in polls. Stocks in Latam also fell on Tuesday, with Mexico's IPC index sliding over 2%, while Argentina's Merval index recovered 2% after Monday's slip. Key Latin American stock indexes and currencies at 1414 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 988.33 -0.45 MSCI LatAm 1970.28 -3.24 Brazil Bovespa 96993.23 -1.64 Mexico IPC 47018.48 -2.12 Chile IPSA 4947.18 -0.84 Argentina MerVal 90964.37 2.059 Colombia COLCAP 1334.84 -1.7 Currencies Latest Daily % change Brazil real 5.3920 -1.26 Mexico peso 20.5350 -1.34 Chile peso 944.6 -1.91 Colombia peso 4251.05 -1.30 Peru sol 3.845 -0.78 Argentina peso 126.2000 -0.18 (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Alistair Bell)