February 10, 2020 / 3:38 PM / 6 months ago

EMERGING MARKETS-Latam assets dip on coronavirus fears; Brazil's real hits new low

    By Shreyashi Sanyal
    Feb 10 (Reuters) - Latin American stocks and currencies were
flat on Monday, on little demand for riskier assets in the face
of a rising death toll from the coronavirus outbreak in China,
while Brazil's real hit a fresh all-time low.  
    Risk assets across the region have been hit by worries of a
slowdown caused by the epidemic in China, which is a major
export destination for Latin American goods. 
    "Investors are quite worried about the overly negative
impact of the coronavirus on the global economy," said Peter
Cardillo, chief market economist at Spartan Capital Securities
in New York.
    On Sunday, 97 more fatalities were recorded - the largest
number in a single day since the virus was detected in the
Chinese city of Wuhan in December. The death toll from the virus
has risen to 908 so far.   
    MSCI's index for Latin American currencies
fell 0.3%, with the Brazilian real weakening 0.1% to
4.3274 per dollar. 
    The currency of South America's biggest economy logged its
sixth weekly drop on Friday, with traders testing the central
bank's resolve not to intervene in the market to arrest its
    Also weighing on emerging market currencies was a stronger
dollar. The greenback hit a four-month high against the euro on
Monday, boosted by higher safe-haven demand and a bullish
outlook for the U.S. economy.
    The Colombian peso eased as prices of oil, the
country's main export, fell on weaker Chinese demand. 
    In Argentina, its new government heads into do-or-die talks
this week with its biggest creditor, the International Monetary
Fund, seeking a deal to postpone debt payments while honoring a
promise to voters to not go along with painful budget cuts.

    The country's peso currency weakened against the
dollar on Monday. 
    Other major currencies in the region - the Mexican peso
, the Chilean peso and the Peruvian sol -
also eased against the greenback. 
    Chilean stocks fell more than 1%, with the largest
South American airline, LATAM Airlines Group, leading
the decline. The fast-spreading virus in China has hit the
travel and tourism industry around the world.     
    Key Latin American stock indexes and currencies at 1516 GMT
     Stock indexes                Latest        Daily %
 MSCI Emerging Markets               1085.30         -0.58
 MSCI LatAm                          2729.73         -0.98
 Brazil Bovespa                    112828.58         -0.83
 Mexico IPC                         44307.88         -0.21
 Chile IPSA                          4631.49         -1.18
 Argentina MerVal                   40937.33        -0.671
 Colombia COLCAP                     1653.85         -0.05
         Currencies               Latest        Daily %
 Brazil real                          4.3225         -0.05
 Mexico peso                         18.7753         -0.08
 Chile peso                            795.6         -0.62
 Colombia peso                        3439.9         -0.75
 Peru sol                             3.3948         -0.20
 Argentina peso (interbank)          60.9775         -0.32

 (Reporting by Shreyashi Sanyal and Medha Singh in Bengaluru)
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