July 17, 2020 / 2:53 PM / a month ago

EMERGING MARKETS-Latam stocks to rise for the week on stimulus optimism

    * Hopes of more fiscal spending supports risk mood
    * Brazilian real to underperform peers for the week 
    * Steady oil prices set Mexican peso for weekly gain

    By Shreyashi Sanyal
    July 17 (Reuters) - Latin American stocks were set to end
the week on a positive note on Friday, as optimism about more
government spending supported hopes of an economic rebound from
the coronavirus-led slump and soothed worries of surging
infections globally.
    Global equities rose on hopes of more fiscal stimulus in the
world's largest economy, with the U.S. Congress set to begin
debating a new aid package next week, as several states in the
country's South and West implement fresh lockdown measures to
curb the virus.
    The MSCI's index for Latin American equities
rose 0.6%, set to end the week higher after hopes for a
coronavirus vaccine and relatively stable commodity prices
lifted risk appetite.  
    "It's a continuation of the push-pull factors influencing
stocks," analysts at AJ Bell wrote in a client note. 
    "On one hand there is ongoing nervousness about the pandemic
and localised flare-ups. On the other hand, there is the hope of
more stimulus measures until there is firm evidence that the
pandemic is under control and economies are getting back on
track."
    Brazil's real declined 0.5% against the dollar
and has underperformed regional peers on the week, as cases in
the world's second largest virus hot spot continued to spike,
diminishing hopes of an economic recovery any time soon. 
    Brazilian Central Bank President Roberto Campos Neto said on
Thursday that the country's economic recovery so far has been
V-shaped, although he expects the pace of growth to slow from
now on.
    The Mexican peso slipped against the dollar on Friday
but the oil exporter is set to end the week higher as crude
prices remained steady.
    A former boss of Mexican state oil company Petroleos
Mexicanos, Emilio Lozoya, faced corruption charges that could
envelop leaders of the previous government. Lozoya was taken to
a hospital early on Friday shortly after his overnight
extradition to Mexico from Spain.
    Rising COVID-19 cases in Latin America have recently
impacted agricultural trade to China, with Argentina and Brazil
temporarily suspending meat exports. Agricultural products form
some of the largest exports to China from the regions.   
    But a local head of the Argentine meat industry said the
temporary suspension poses no long-term threat to the sector.
 
    Also in Argentina, its government sent a bill to Congress
late on Thursday night laying out plans to restructure public
debt in dollars issued under local law, offering creditors new
instruments in both foreign currency and pesos.
    Key Latin American stock indexes and currencies;
    
  Stock indexes             Latest       Daily %
                                         change
 MSCI Emerging Markets        1053.78         0.74
                                       
 MSCI LatAm                   1992.59         0.59
                                       
 Brazil Bovespa             101750.89         1.19
                                       
 Mexico IPC                  36266.89        -0.55
                                       
 Chile IPSA                   4013.89        -0.69
                                       
 Argentina MerVal            45663.55        0.925
                                       
 Colombia COLCAP              1149.55        -0.31
                                       
                                                  
      Currencies            Latest       Daily %
                                         change
 Brazil real                   5.3490        -0.41
                                       
 Mexico peso                  22.4835        -0.32
                                       
 Chile peso                     787.3        -0.80
                                       
 Colombia peso                3645.53        -0.28
                                       
 Peru sol                      3.5057        -0.06
                                       
 Argentina peso               71.4700        -0.07
 (interbank)                           
                                       
 Argentina peso                   126         3.17
 (parallel)                            
                                       
 

 (Reporting by Shreyashi Sanyal in Bengaluru; editing by
Jonathan Oatis)
  
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