July 14, 2020 / 7:24 PM / 21 days ago

EMERGING MARKETS-Latam stocks gain; Brazil's real up on economic recovery hopes

    * Brazil stocks eye best close since early-March
    * Chilean peso flat as copper prices retreat
    * Mexican economic recovery to be slow- Analyst

 (Adds bullets, background; updates prices)
    By Shreyashi Sanyal and Ambar Warrick
    July 14 (Reuters) - Brazil's real and its Latin American
peers rose on Tuesday on improving economic data in the region's
largest economy, although broader sentiment was constrained by
increasing coronavirus cases.
    The real added 1%, bouncing back from session lows as
data showed monthly economic activity in Brazil began to grow
again in May, after two sharp consecutive declines in March and
April.
    Brazil's Bovespa stock index also rose, eyeing its
strongest close in more than four months on the back of material
stocks.
    Iron ore miner Vale was among the biggest boosts
to the Bovespa, tracking strength in prices of the commodity,
which have been supported by hopes of increased demand from
China.
    Mexico's peso rose 1.5% against the dollar. Recent
data from the country have suggested that the worst is likely
over but with limits on economic activity as the coronavirus
spreads rapidly.
    "The government is sticking to its austerity course and is
offering only little financial aid to the economy," Commerzbank
analysts wrote in a client note. "Against this background, the
economic recovery is likely to be very slow."
    Most currencies in the region have regained some lost ground
from a steep sell-off in March, but high dollar demand and
loosening monetary policy have kept them rangebound.
    Still, some commodity-linked currencies have outperformed in
recent weeks on improving raw material prices.
    The Chilean peso was flat as copper prices fell on
Tuesday, while oil-exporter Colombia's peso mirrored a
dip in crude prices.
    Investors also awaited a policy statement from the Chilean
central bank on Wednesday, which will likely show the benchmark
interest rate remained at 0.5% in July.  
    Risk appetite was sparse in global equity markets after a
reintroduction of coronavirus restrictions in the U.S. state of
California offset encouraging earnings reports from big banks on
Wall Street.
    COVID-19 cases continued to spike in South America and other
countries. A Reuters count on Monday showed that
coronavirus-related deaths in Latin America had exceeded the
figure for North America, for the first time since the start of
the pandemic.
    Simmering U.S.-China tensions also hit sentiment after the
Washington rejected Beijing's claims to offshore resources in
most of the South China Sea.
    Key Latin American stock indexes and currencies:
    
    Stock indexes             Latest      Daily % change
 MSCI Emerging Markets         1060.17               -1.04
                                        
 MSCI LatAm                    1979.76                1.15
                                        
 Brazil Bovespa              100232.47                1.56
                                        
 Mexico IPC                   36116.11               -0.75
                                        
 Chile IPSA                    4165.59                1.22
                                        
 Argentina MerVal             43533.70               0.686
                                        
 Colombia COLCAP               1144.20               -0.08
                                        
                                                          
       Currencies             Latest      Daily % change
 Brazil real                    5.3352                0.97
                                        
 Mexico peso                   22.4330                1.46
                                        
 Chile peso                      787.7                0.15
                                        
 Colombia peso                 3622.49               -0.30
 Peru sol                       3.4978               -0.03
                                        
 Argentina peso                71.2900               -0.07
 (interbank)                            
                                        
 
 (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Richard
Chang)
  
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