February 14, 2020 / 2:54 PM / 13 days ago

EMERGING MARKETS-Brazil's real rebounds from record low; virus scare keeps stocks on edge

    * Real firms over 1% as central bank sells dollars
    * Brazilian equities fall on caution around coronavirus
    * Mexican peso firms a day after interest rate cut
    * Chilean equities track copper prices lower

    By Sagarika Jaisinghani and Susan Mathew
    Feb 14 (Reuters) - Brazil's real bounced back from record
lows on Friday after the central bank intervened for the first
time since November, but equities in the country were pressured
by caution around the coronavirus epidemic.
    The real firmed 1% and was on track for its best day
in two months, as the central bank sold $1 billion in foreign
exchange swaps on Thursday. The currency was also set to break a
six-week losing streak that was fueled by tepid economic growth.
    Fresh data on Friday showed economic activity in Brazil fell
more than expected in December, tying in with other indicators
that pointed to a slowdown in Latin America's largest economy at
the end of last year.
    The real, which was also battered in 2019 by failed oil
auctions, has already lost more than 6% this year and is among
the worst performing regional currencies against the dollar.
    "The current situation is supportive of a weaker real
because recent activity data has also disappointed," said Wilson
Ferrarezi, an economist at TS Lombard in Sao Paulo.
    "However, the perception is that if the coronavirus
situation improves, this could alleviate pressure on Brazilian
markets."
    The epidemic has prompted economists to cut growth forecasts
for China's GDP in the first quarter and sparked a flight from
assets in Brazil, which is among the main iron ore exporters to
China. Brazilian equities fell 0.2% on Friday, sliding
for the second straight session.
    Health authorities reported about 5,000 new cases of the
deadly virus on Friday, dashing earlier indications that the
outbreak was peaking. But global stock markets inched higher as
policymakers pledged more monetary stimulus to limit its
economic fallout.
    A basket of Latin American currencies was up
0.4% and was on course for its fourth straight day of gains,
while its counterpart tracking equities rose
0.3%.
    The Mexican peso added about 0.1%, a day after
Mexico's central bank cut its benchmark interest rate for a
fifth consecutive time in the wake of a stagnating economy and
slightly above-target headline inflation.
    Chile's peso rose 0.4% but the equity index
fell about 0.1%, tracking copper prices. The country is the
biggest exporter of the red metal.  
        
    Key Latin American stock indexes and currencies at 1420 GMT:
     Stock indexes              Latest     Daily % change
 MSCI Emerging Markets           1107.65              0.14
                                          
 MSCI LatAm                      2801.67              0.29
                                          
 Brazil Bovespa                115422.57             -0.21
                                          
 Mexico IPC                            -                 -
                                          
 Chile SPIPSA                    4654.90             -0.11
                                          
 Argentina MerVal               38859.60             0.492
                                          
 Colombia Colcap                       -                 -
                                          
                                                          
        Currencies              Latest     Daily % change
 Brazil real                      4.3043              0.71
                                          
 Mexico peso                     18.5891              0.00
                                          
 Chile peso                        790.4              0.62
                                          
 Colombia peso                   3369.15              0.14
 Peru sol                         3.3788              0.15
                                          
 Argentina peso (interbank)            -                 -
                                          
                                                          
 
 (Reporting by Sagarika Jaisinghani in Bengaluru; Editing by
Steve Orlofsky)
  
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