January 24, 2020 / 7:58 PM / a month ago

EMERGING MARKETS-Latam assets dip as China virus fears diminish risk appetite

    * Brazil's real eyes fourth straight weekly decline
    * Latam "bellwether" for EM anxiety in Asia holiday- Analyst
    * Argentine stocks set for worst week since early Nov

 (Adds details, updates prices)
    By Ambar Warrick
    Jan 24 (Reuters) - Latin American assets retreated on Friday
amid renewed concerns over the economic fallout from a Chinese
coronavirus, especially after the United States confirmed a
second case. 
    While the World Health Organization has declared the
flu-like virus outbreak as an "emergency in China" and not of
international concern, investors are worried over its effects on
the world's second-largest economy during a key holiday season.

    Major Latin American currencies softened against the dollar,
with an index of regional currencies shedding
about 0.4%. 
    Brazil's real dropped about 0.5% to the dollar, and
was set for a fourth straight weekly decline. Data showed that 
Latin America's largest economy saw its strongest annual rate of
jobs growth since 2013.
    "We are on Lunar holiday for the major Asian markets, so our
bellwether for anxiety in EMs will be primarily in Latin
America, and to a lesser extent Eastern Europe," said Eric 
Leve, chief investment officer at wealth manager Bailard.
    However, he added that as seen with past viral outbreaks,
"the market impacts tend to be very short-term and revert
quickly." 
    The Mexican peso and the Colombian peso also
retreated to the dollar, as the price of oil-a major export for
both countries- eyed its worst week since late-2018.
    Colombia's central bank is expected to leave its benchmark
interest rate unchanged at its January meeting, a Reuters poll
showed, amid expectations inflation will move closer to the
long-term target this year as economic growth stabilizes at
current levels.
    The Chilean peso was slightly weaker against the
dollar. The country's central bank is also expected to hold its
benchmark rate in January, a poll showed, as it seeks to spur
the ailing economy following months of unrest in the mining
nation.
    Latin American stocks also dropped, with the
regional equities index down more than 1% for the week. 
    The index, which was fairly stable at the start of trade,
tracked losses in Wall Street after the United States confirmed
a second case of the Chinese virus.
    "The weakness this week for Latin America does broadly
reflect the weakness in emerging markets as a whole, which have
been sold off lockstep with news on the coronavirus," Bailard's
Leve said.
    Brazil's Bovespa index came off a record high to
shed around 1%, while Mexican stocks eyed their worst
week since early-December.
    Argentine stocks fell more than 2%, and eyed their
worst week in more than two months. 
    
    Key Latin American stock indexes and currencies at 1931 GMT:
    
    Stock indexes             Latest      Daily % change
 MSCI Emerging Markets         1117.93               -0.38
                                        
 MSCI LatAm                    2891.22               -1.15
                                        
 Brazil Bovespa              118314.32               -1.02
                                        
 Mexico IPC                   45193.93               -0.62
                                        
 Chile IPSA                    4640.72               -0.24
                                        
 Argentina MerVal             40123.15              -2.472
                                        
 Colombia COLCAP               1642.75               -0.33
                                        
                                                          
       Currencies             Latest      Daily % change
 Brazil real                    4.1854               -0.49
                                        
 Mexico peso                   18.8227               -0.35
                                        
 Chile peso                        777               -0.14
                                        
 Colombia peso                    3363               -0.12
 Peru sol                        3.323               -0.12
                                        
 Argentina peso                60.0900                0.00
 (interbank)                            
                                        
 
    

 (Reporting by Ambar Warrick in Bengaluru; Editing by Cynthia
Osterman)
  
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