SAO PAULO, Oct 6, 2008 (AFP) - A stock market rout across Latin America left indices reeling Monday, blowing apart assurances by leaders that the region was relatively sheltered from the world financial crisis.

Brazil, the largest economy in the zone, suffered badly. Trading was suspended twice when massive equity sell-offs triggered 'circuit breakers' and the Ibovespa index fell more than 15 percent.

After transactions resumed, shares eventually clawed their way back, paring losses to 5.43 percent just before close.

The nation's currency, the real, plummeted 7.57 percent against the dollar, to 2.20 for the greenback -- it's lowest level in two years.

Mexico, the next-biggest economy, saw its shares have their second-worst day of the year, falling 5.4 percent to 21,749.13 points.

Argentina's bourse fell 5.9 percent, after some bargain buying brought it up from an 11 percent loss seen during the day.

Chile's equities hemorrhaged 7.05 percent. Peru's stock market slid 9.82 percent. And Colombia's shares ended down 4.86 percent.

The dramatic losses reflected a worldwide equities bloodbath. Investors everywhere dumped shares as fears soared that a depression was on the way as a result of the financial crisis emanating from the United States.

Latin American leaders who had been boasting that their countries would weather the storm were left embarrassed by the savage contradiction by the market.

Brazilian President Luiz Inacio Lula da Silva had said on Sunday that his country 'runs no risk whatsoever' from the crisis and vowed to forge on with billion-dollar state projects.

Investors, though, were concerned that the global downturn would hit Brazil's all-important commodities exports hard through severely diminished demand for raw materials.

'Brazil is vulnerable to the crisis and has to take care,' an economist, Miguel Daoud, told AFP.

Lula's finance minister, Guido Mantega, raged that the market Monday 'was irrational and adopted a lemming-like mentality.' But he predicted that 'the crisis has hit its peak.'

Fear, though, was also striking Argentina, whose economy was still fragile after its 1999 collapse.

There, President Cristina Kirchner was struggling against the commodities price fall, even as she sought ways to shore up her government's finances in the teeth of farmers' unrest and runaway inflation.

An Argentine economist, Eduardo Curia, said '2009 looks like a complicated horizon ... with certain economic deceleration and less job creation.'

Chilean President Michele Bachelet, visiting Buenos Aires, said the moment called for 'strong states' to assert their market-calming role.

Mexico, with its continued dependence on the United States just over the border, was also seen as heading for trouble.

Its economic growth forecast for this year has been slashed from 3.5 percent of gross domestic product to less than two percent, and remittances from Mexicans living in the United States are declining.

Venezuela, the main oil exporter in the region, has been hit by declining oil prices.

The fiercely anti-US president, Hugo Chavez, on Sunday said he was seeking to join a 'new financial system' grouping Iran, Russia and China to escape the worst of the crisis.