March 25, 2020 / 7:51 PM / 10 days ago

EMERGING MARKETS-Latam stocks extend gains, FX firms on global stimulus hopes

    * Mexican peso posts biggest gain in 9 years
    * Argentine stocks jump 10% after two-day break
    * Latam stocks down nearly a third in March

 (Adds details on Argentina, updates prices)
    By Ambar Warrick and Susan Mathew
    March 25 (Reuters) - Latin American stocks extended their
rally on Wednesday, while currencies recovered ground amid
increasing optimism over stimulus measures aimed at combating
the economic shock from the coronavirus outbreak. 
    Stocks in Brazil, Chile and Mexico
added to gains made on Tuesday, while their respective
currencies recovered slightly from recent lifetime lows.
    The MSCI's index of Latin American stocks
added more than 10%, adding to an 8% gain made on Tuesday. The
index has shed nearly a third of its value this month.
    Central banks and governments around the world have taken
drastic measures to cushion the blow from the coronavirus
pandemic, most notably the U.S. Federal Reserve's limitless
quantitative easing and Washington's $2 trillion stimulus
package that awaits passage by Congress.
    While the measures are expected to stimulate economic
growth, doubts still persisted about whether they would be
effective amid widespread lockdowns due to the outbreak. 
    "All this action is unprecedented for a condition that is as
well," said Juan Perez, senior foreign exchange trader and
strategist at Tempus Inc. 
    "The 2008 crisis and World Wars saw a lot of money move too,
but this is giving out while no one can act."
    All the stimulus announcements eased the rush to the dollar.

    Mexico's peso added 3.8%, its best intraday gain
since 2011 as data on Wednesday showed Mexican retail sales rose
0.5 percent in January from December.
    Brazil's real firmed 1.7% after data showed services
activity grew more than expected year-on-year in January, while
according to a mid-month measure of consumer inflation virtually
evaporated in March, as air travel costs plunged.

    Separate data showed Brazil posted its widest current
account deficit in over four years in February.
    But presidents of both Mexico and Brazil have been
criticized for being lax about the outbreak, urging citizens to
go out to restaurants and to work, while an increasing number of
countries are going into lockdowns to contain the spread of the
virus.
    "Yes, you do want to minimize inactivity, but Latam giants
like Brazil and Mexico must join the chorus if those economies
are to be perceived as healthy later on," Tempus Inc's Perez
said.  
    "Your economy must look fully ready to go back into full
throttle. That will only happen when it is guaranteed that is
safe to work and socialize." 
    Argentine stocks resumed trade with a 10% jump,
after a two-day holiday, while the peso declined
slightly. 
    Reuters exclusively reported that soybean deliveries to
crushing plants have been severely cut in Argentina, the world's
top supplier of soymeal livestock feed, as the country reacts to
the coronavirus pandemic.
        
    Key Latin American stock indexes and currencies at 1940 GMT:
    
    Stock indexes             Latest       Daily % change
 MSCI Emerging Markets          839.86                  4.77
                                        
 MSCI LatAm                    1651.32                 10.23
                                        
 Brazil Bovespa               76360.76                  9.51
                                        
 Mexico IPC                   35995.11                  4.14
                                        
 Chile IPSA                    3123.51                   7.9
                                        
 Argentina MerVal             26455.66                10.738
                                        
 Colombia COLCAP               1042.59                 12.89
                                        
                                                            
       Currencies             Latest       Daily % change
 Brazil real                    5.0156                  1.28
                                        
 Mexico peso                   23.9200                  3.79
                                        
 Chile peso                      844.5                  0.08
                                        
 Colombia peso                    4064                  1.13
 Peru sol                       3.4758                  1.23
                                        
 Argentina peso                64.0475                 -0.43
 (interbank)                            
                                        
 
    

 (Reporting by Susan Mathew in Bengaluru;
Editing by Alistair Bell)
  
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