Updates to mid-session trading

By Purvi Agarwal, Avinash P and Johann M Cherian

May 18 (Reuters) - Most Latin American currencies and stocks gained on Monday as hopes of easing Middle East tensions boosted sentiment, after the conflict stoked fears over global growth and inflation.

MSCI's gauge tracking LatAm stocks .MILA00000PUS added 0.5%, while the currencies index .MILA00000CUS was up 0.9%. On Friday, they had logged their sharpest weekly falls since March 2, when the Iran conflict began.

U.S. President Donald Trump said he was holding off on a planned military attack on Iran scheduled for Tuesday, hours after a Pakistani source said the mediator country had shared a revised Iranian proposal with the U.S.

Earlier on Monday, Iran's Tasnim news agency, citing a source close to Iran's negotiating team, said the U.S. had agreed to waive sanctions on Tehran's oil exports temporarily.

The headlines raised expectations of a resolution to the conflict, tempering gains in crude oil prices and extending declines in the safe-haven dollar.

"A lot hinges on whether we see a credible path to de-escalation and a workable resolution in the region — and that outcome is not clear-cut," said a team of analysts led by Paul Mackel at HSBC.

"Until there is more certainty, it is hard to rule out further disruption or renewed FX volatility."

LATAM CURRENCIES FIRM

Copper producer Chile's peso CLP= appreciated nearly 1%, after posting its biggest weekly fall in more than two months on Friday.

Local stocks .SPIPSA, however, slipped 0.2% after data showed the economy recorded its sharpest annual decline in more than three years in the first quarter due to a slump in the mining sector.

Oil exporter Brazil's real BRL= rebounded nearly 1% from more than a month low. The finance ministry sharply raised its inflation forecast for this year and said it sees a more modest monetary easing cycle.

Separately, the ministry also said it expects roughly $1.7 billion in additional monthly revenue from the oil shock driven by the Middle East conflict.

"The carry is still attractive in LatAm and that has given the region some sort of resilience in a global risk of environment," said Andres Abadia, chief LatAm economist at Pantheon Macroeconomics, highlighting the role of high interest rates in some economies.

The greater focus is upcoming elections later this year, ahead of which a poll indicated that President Luiz Inacio Lula da Silva and Senator Flavio Bolsonaro were still tied.

It comes days after a report linked Bolsonaro to a disgraced banker, while analysts worried that it would impact Bolsonaro's chances in the election.

Meanwhile, rising bets on interest-rate hikes by global central banks deepened a global bonds rout. EM bonds also took a beating, with Sri Lankan bonds down over 1 cent on the dollar, and those of Kenya fell about 0.6 cent broadly, TradeWeb data showed.

Peru's sol PEN= firmed 0.2%, although MSCI's gauge for local stocks .MIPE00000PUS lost 3% and briefly hit its lowest since March 30.

Peru's top electoral authority pledged on Sunday to correct "flaws" that delayed April's first-round election results by a month ahead of a June presidential runoff between right-wing candidate Keiko Fujimori and leftist Roberto Sanchez.

Venezuelan bonds USP17625AB3=1M, USP97475AN0=1M rallied over 2 cents on the dollar. The country announced restructuring plans of its defaulted debt last week.

Elsewhere, protests over fuel price hikes prompted by the Iran war erupted in several Kenyan towns, including a nationwide public transport strike.

Key Latin American stock indexes and currencies at 19:19 GMT:

Stock indexes	Latest	Daily % change
MSCI Emerging Markets .MSCIEF	1665	-0.19
MSCI LatAm .MILA00000PUS	3035.92	0.53
Brazil Bovespa .BVSP	176408.94	-0.49
Mexico IPC .MXX	68347.71	0.55
Chile IPSA .SPIPSA	10406.57	-0.17
Argentina MerVal .MERV	2808958.9	3.73
Colombia COLCAP .COLCAP	2101.08	-0.98

Currencies	Latest	Daily % change
Brazil real BRL=	5.0061	0.97
Mexico peso MXN=	17.2818	0.28
Chile peso CLP=	900.02	0.97
Colombia peso COP=	3797.75	-0.16
Peru sol PEN=	3.4219	0.21
Argentina peso (interbank) ARS=RASL	1,395.5	0.00
Argentina peso (parallel) ARSB=	1,400.0	1.06