June 26, 2020 / 7:39 PM / 15 days ago

EMERGING MARKETS-Latam stocks, FX set to mark third week in red as virus cases surge

 (Updates prices)
    By Shreyashi Sanyal and Susan Mathew
    June 26 (Reuters) - Latin American currencies and stocks
eyed their third straight week of declines as rising coronavirus
cases in the region and globally put a question mark over the
pace of recovery from the pandemic-fueled slump. 
    The MSCI's index for Latin American stocks
tumbled 3.6% for its worst session in two months, while its
currencies counterpart fell 1.8%. Over the week,
they were down about 4% and 1.5%, respectively.
    Cases in South America continued to accelerate, with
Mexico's health ministry reporting 6,104 new confirmed cases and
736 deaths on Thursday, while the country's Finance Minister
Arturo Herrera tested positive for the virus.
    Brazil remained the second largest COVID-19 hot spot in the
world, topped only by the United States, which reported a record
daily rise in cases on Thursday. 
    Some month and quarter-end adjustments could also be playing
into markets, analysts said. 
    The Brazilian real led declines among regional
counterparts, weakening 2.6% against a steady dollar, while the
country's main stock index looked to post its biggest
drop since late April.
    In Latin America's biggest economy, the Federal University
of Sao Paulo is in talks to test a potential coronavirus vaccine
developed by Italian researchers.
    Mexico's peso slipped 1.4% after data showed Mexico's
economy posted a record contraction in April, highlighting the
devastation caused by lockdowns on economic activity,
particularly in manufacturing.
    The Chilean peso also fell 1%, as the world's biggest
copper miner Codelco said it was suspending refinery and foundry
operations at its sprawling Chuquicamata division to prevent
further spread of the coronavirus.    
    An unabated rise in cases and gloomy economic forecasts have
stalled a sharp recovery for Latin American stocks from a
meltdown in March, with investors doubtful if current stimulus
measures will suffice. 
    Meanwhile, International Monetary Fund Managing Director
Kristalina Georgieva said the global economic crisis due to the
coronavirus could ultimately test the fund's $1 trillion in
total resources, "but we're not there yet."
    Next week, investors will be watching for a rate decision
from Colombia's central bank, and manufacturing PMIs for June
for Mexico and Brazil. A Reuters polls showed Argentina's
economic activity, due on Monday, likely plunged 21% in April.

    Key Latin American stock indexes and currencies at 1924 GMT:
  Stock indexes           Latest   Daily %
 MSCI Emerging Markets     998.81    -0.56
 MSCI LatAm               1856.84    -3.55
 Brazil Bovespa          93611.28    -2.47
 Mexico IPC              37499.85    -0.62
 Chile IPSA               4012.17    -0.65
 Argentina MerVal        40590.31   -3.349
 Colombia COLCAP          1118.02    -0.62
      Currencies          Latest   Daily %
 Brazil real               5.4627    -2.49
 Mexico peso              22.9910    -1.50
 Chile peso                 819.4    -0.95
 Colombia peso               3747    -0.44
 Peru sol                  3.5277    -0.71
 Argentina peso           70.2100    -0.07
 (Reporting by Shreyashi Sanyal in Bengaluru; editing by
Jonathan Oatis and Tom Brown)
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