April 24, 2020 / 3:16 PM / in a month

EMERGING MARKETS-Brazil real, stocks battered on political turmoil during pandemic

    * Real hits record low of 5.7139 to the dollar
    * MSCI Latam stocks, FX indexes fall
    * Mexican peso sees steep weekly loss

    By Ambar Warrick
    April 24 (Reuters) - Brazilian stocks and the real plummeted
on Friday as political turmoil in the country added to mounting
concerns over the coronavirus outbreak, while risk aversion
ravaged Latin American markets. 
    The real sank 2.8% to a third straight record low, on
track for its worst week in nearly five years with an 8.5% loss.
Analysts are watching for an interest rate cut by the central
bank next month.
    Brazil's benchmark stock index dropped around 8%,
eyeing its worst session since mid-March, when initial fear of
the outbreak spurred panicked selling. 
    In addition to weak global economic readings and doubts
about a possible drug to treat COVID-19, Brazil's markets were
further rattled by a report that Justice Sergio Moro will
announce his resignation on Friday after President Jair
Bolsonaro fired the head of the federal police.
    The political row came as the coronavirus outbreak began to
gather steam in Brazil. Bolsonaro has faced widespread criticism
for his handling of the outbreak. 
    "Economists must worry about the limitations in gauging just
how much the largest South American economy will cope, when even
the U.S. is struggling with examining who has the infection to
better assess a rightful return to normalcy," said Juan Perez,
senior currency trader at Tempus Inc in Washington. 
    "Plus the idiosyncrasies also playing to Brazil," Perez
added, noting the firing of the head of police. "We have no
faith in BRL."  
    Data also showed that industrial confidence in Latin
America's largest economy crashed to record-low levels on
Friday.
    Other Latin American risk assets retreated, with the Mexican
peso falling slightly. Stocks in the country were
a touch higher.
    The peso was set to lose about 5% for the week, as a crash
in oil prices, coupled with a surprise rate cut by the central
bank weighed on the currency.
    Argentine stocks retreated as the coronavirus crises
added to concerns over the country defaulting on its sovereign
debt. 
    Argentina's Buenos Aires province unveiled on Thursday a
restructuring offer to holders of its foreign law debt similar
to the one unveiled by the federal government.
    The MSCI's index of Latin American stocks
sank 7%, while currencies fell 2.7%. Both
indexes were set to mark large weekly losses.
    Key Latin American stock indexes and currencies at 1503 GMT
    
    Stock indexes             Latest      Daily % change
 MSCI Emerging Markets          878.08               -1.54
                                        
 MSCI LatAm                    1478.22               -7.36
                                        
 Brazil Bovespa               73325.07               -7.97
                                        
 Mexico IPC                   34338.84                0.29
                                        
 Chile IPSA                    3723.03               -0.68
                                        
 Argentina MerVal             29115.19               -4.16
                                        
 Colombia COLCAP               1136.80                -1.3
                                        
                                                          
       Currencies             Latest      Daily % change
 Brazil real                    5.6833               -2.76
                                        
 Mexico peso                   24.8650               -0.24
                                        
 Chile peso                      860.2               -0.19
                                        
 Colombia peso                 4036.75               -0.61
 Peru sol                       3.3787               -0.21
                                        
 Argentina peso                66.4200               -0.15
 (interbank)                            
                                        
 
 (Reporting by Ambar Warrick in Bengaluru; Editing by David
Gregorio)
  
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