January 21, 2020 / 2:58 PM / 6 months ago

EMERGING MARKETS-Latam assets fall as China virus outbreak spurs risk-off mood

    * Global markets spooked by China virus outbreak  
    * IMF trims back global growth forecasts
    * Latam stocks index set to end three-day winning streak

    By Shreyashi Sanyal
    Jan 21 (Reuters) - Stocks and currencies across Latin
America fell on Tuesday, as investors turned away from riskier
assets on concerns over a mysterious flu-like virus outbreak in
China, while a weak global growth forecast by the IMF added to
the downbeat mood.
    Global financial markets were spooked after the death toll
from the virus in China climbed to six on Tuesday as new cases
surged beyond 300 and as officials confirmed the coronavirus
strain is contagious between humans.
    "Risk appetite remains fragile this morning as contagion
concerns from a viral outbreak in China ratcheted higher
overnight. On that basis, we see merit in maintaining elements
of a defensive posture in FX markets," Ned Rumpeltin, European
head of FX strategy at TD Securities wrote in a note.
    MSCI's index for Latin American stocks fell
0.8%, on track to snap a three-day winning streak. MSCI's index
for currencies in Latin America dropped 0.3%. 
    The risk averse mood was also backed by global growth fears
after the International Monetary Fund trimmed back its global
growth forecasts for 2020 and 2021.
    The reductions reflect the IMF's reassessment of economic
prospects for a number of major emerging markets as it marked
down growth forecasts for Chile due to social unrest and for
Mexico, due to a continued weakness in investment.
    The Mexican peso weakened 0.2% to 18.7021 against the
dollar, while the Chilean peso firmed slightly.  
    Key Latin American stock indexes and currencies at 1441 GMT:
    Stock indexes             Latest     Daily %
 MSCI Emerging Markets         1127.55     -1.5825
 MSCI LatAm                    2906.01        -0.8
 Brazil Bovespa              118269.23        -0.5
 Mexico IPC                          -           -
 Chile IPSA                    4777.68        -0.8
 Argentina MerVal             42869.30      -0.429
 Colombia COLCAP               1654.89       -0.09
       Currencies             Latest     Daily %
 Brazil real                    4.1986       -0.26
 Mexico peso                   18.7033       -0.24
 Chile peso                      770.1       -0.09
 Colombia peso                  3343.1       -0.39
 Peru sol                        3.316        0.00
 Argentina peso                59.9900        0.10
 (Reporting by Shreyashi Sanyal in Bengaluru
Editing by Nick Zieminski)
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