Updates with afternoon levels

By Avinash P and Ragini Mathur

June 9 (Reuters) - Latin American assets snapped a four-session losing streak as investors on Tuesday weighed a fragile Iran-Israel ceasefire and hopes for de-escalation in the Middle East, while Peru's stocks headed for their best day in over two years.

MSCI's index of Latin American stocks .MILA00000PUS gained 1%, while the gauge of regional currencies .MILA00000CUS edged up 0.2%.

The mood remained cautious, however, after fresh hostilities threatened to unravel the tentative truce. U.S. President Donald Trump said Iran had shot down a U.S. Apache helicopter in the Strait of Hormuz and vowed to respond.

Israel, meanwhile, struck the historic southern Lebanon port city of Tyre, killing at least eight people. Iran and Israel had announced a halt in attacks on each other on Monday.

Investors were wary as diplomacy has so far failed to produce a peace deal or reopen the Strait of Hormuz, a vital artery for global oil supplies.

The U.S. Dollar =USD traded in flat to lower range, aiding LatAm currencies.

Peru commanded the most attention. The country's presidential race tightened dramatically overnight, with candidates separated by less than 0.1% as overseas ballots swung the count back toward conservative Keiko Fujimori, sending markets surging.

Lima's stock index .MXNUAMPESCPGPE jumped 4.6%, its biggest one-day gain since late 2023, while the sol PEN= surged 2.2%.

"The slower official count shows Fujimori in the lead. If the quick count is confirmed, a Sánchez victory would run counter to our baseline economic outlook," said Debora Reyna, economist at Oxford Economics.

"A potential Sánchez administration wouldn't hold a majority in Congress, forcing it to build consensus to pass reforms."

In Mexico, the annual inflation rate decelerated for a second month in a row in May, official data showed, returning to the higher end of the central bank's target.

Mexico's stocks .MXX were down 0.5% and the peso MXN= appreciated 0.1%.

"The larger-than-expected fall in Mexican inflation, to 3.9% y/y in May, will be welcomed by Banxico," said Kimberley Sperrfechter, senior emerging markets economist at Capital Economics.

"Barring a major escalation in the Iran conflict and a sharp rise in energy prices, we think that rates will be left unchanged at 6.50% for the foreseeable future."

Brazil's Bovespa index .BVSP added 0.7% and the real BRL= gained 0.3%. Brazil's government plans to take action to curb the Middle East conflict's effect on fuel prices as long as it continues, Finance Minister Dario Durigan said.

Last month, the administration had renewed fuel tax exemptions and subsidies ahead of President Luiz Inacio Lula da Silva's reelection bid later this year.

Key Latin American stock indexes and currencies:

Stock indexes	Latest	Daily % change
MSCI Emerging Markets .MSCIEF	1709.22	3.26
MSCI LatAm .MILA00000PUS	2881.74	1.04
Brazil Bovespa .BVSP	169802.11	0.67
Mexico IPC .MXX	65335.22	-0.48
Chile IPSA .SPIPSA	10503.15	3.37
Argentina MerVal .MERV	3142677.89	0.99
Colombia COLCAP .COLCAP	2252.33	2.71
Currencies	Latest	Daily % change
Brazil real BRL=	5.1786	0.29
Mexico peso MXN=	17.4417	0.09
Chile peso CLP=	915.97	0.65
Colombia peso COP=	3567.21	0.61
Peru sol PEN=	3.3886	2.2
Argentina peso (interbank) ARS=RASL	1,441.0	0.38
Argentina peso (parallel) ARSB=	1,440.0	0.35