Updates with late afternoon trading

By Pranav Kashyap and Purvi Agarwal

March 11 (Reuters) - Most Latin American currencies and stocks fell on Wednesday, as investors assessed the implications of the Middle East conflict, now in its twelfth day, while also parsing local economic data.

MSCI's gauge of regional equities .MILA00000PUS slipped 1% from a one-week high. Its counterpart tracking Latin American currencies .MILA00000CUS fell 0.6%, retreating from recent peaks.

Iran's military command said the world should be prepared for oil to hit $200 a barrel as hostilities continued, in sharp contrast to Tuesday's de-escalation hopes after U.S. President Donald Trump predicted the war was nearly over, which fueled a global relief rally.

The International Energy Agency agreed to release 400 million barrels of oil on Wednesday, the largest such move in its history, to try to restrain soaring crude oil prices, which settled more than 4% higher on the day.

Investors remain on edge as the war threatens to choke global energy trade and trigger a fresh price shock, a risk world leaders are scrambling to contain.

"As long as the Strait of Hormuz remains all but shut, tapping IEA emergency oil reserves would only offer a short-lived remedy," said Elias Haddad, global head of markets strategy at Brown Brothers Harriman. "It would not take much for fears to flare up again."

Latin America's commodity-heavy and oil-exporting economies have held up better than the oil-dependent peers in Asia and emerging Europe. Still, analysts said a broader flight to safe-haven assets, coupled with growing concerns about a global economic slowdown, has started to weigh on the region.

"As long as oil prices stay high, traders will distinguish between (non-belligerent) oil producers/exporters and oil importers on the other... To us, Brazil, Colombia and South Africa are the biggest gainers," said Thierry Wizman, global FX and rates strategist at Macquarie Group.

Colombia's peso COP= and Brazil's real BRL= were both subdued. Mexico's peso MXN= weakened 0.5% against a rising dollar, driven by safe-haven appeal.

Chile's peso CLP= depreciated 0.5%, after clocking its biggest one-day jump since November 2023 in the previous session. Local stocks .SPIPSA fell 0.9%, partly weighed down by a dip in copper prices.

Heavyweight Brazilian stocks .BVSP were muted. Brazil's retail sales volumes exceeded expectations and returned to the positive territory in January, government data showed.

Separately, U.S. inflation ticked up in line with estimates in February, but was overshadowed by the Iran war.

In Buenos Aires, stocks .MERV advanced 2.4%. They were hovering near their highest in two weeks and set for a fourth straight session of gains — their longest winning streak in more than a month.

The rally came a day after President Javier Milei sought to reassure Wall Street that Argentina's economic recovery remains on course despite market jitters sparked by the war in Iran, and said the central bank would soon be flush with dollars.

The peso ARS=RASL, however, surrendered its early declines and was last trading 0.3% higher against the dollar.

Although the regional equity and currency indexes have pared part of their early-year gains, they are still up 14% and 6%, respectively, so far in 2026 — outperforming the S&P 500 .SPX, which remains in the negative territory.

Key Latin American stock indexes and currencies:

(Reporting by Pranav Kashyap and Purvi Agarwal in Bengaluru; Editing by Joe Bavier and Shilpi Majumdar)

((pranav.kashyap@tr.com; +919886482111;))