January 28, 2020 / 7:25 PM / 7 months ago

EMERGING MARKETS-Latam assets bounce back from 'exacerbated' virus-driven drop

    * Markets watching for further developments in Wuhan virus
    * Mexican peso marks best gain in nearly 3 months
    * Azul SA leads Brazil stocks higher

 (Adds details, updates prices)
    By Ambar Warrick
    Jan 28 (Reuters) - Latin American assets recovered on
Tuesday as markets reassessed a steep sell-off in the previous
session, driven by fears over the economic damage from the
Chinese coronavirus.
    MSCI's index for Latin American currencies
rose 0.7%, having lost nearly 1% in the prior session. Regional
equities had marked their worst day in over five
months on Monday. 
    Amid ongoing efforts by the Chinese government to corral the
spread of the virus, markets have been increasingly sensitive to
the virus' rapidly increasing death toll and spread. 
    "There's been some adjustment today. Part of the market is
seeing yesterday's move as too exacerbated," said Wilson
Ferrarezi, economist at TS Lombard.
    "Market players are currently watching for further
developments, and how the Chinese authorities will handle the
contagion." 
    Mexico's peso saw its best gain against the dollar in
nearly three months, as data showed the country posting its best
trade surplus in more than 20 years in December. 
    The signing of a trade pact between the United States,
Mexico and Canada on Wednesday has also spread some optimism in
Mexico, which has seen its economy flirt with recession over the
past year. 
    Brazil's real strengthened slightly against the
dollar. Latin America's largest economy is expected to see an
increase in outstanding public debt, the Treasury said.
 
    Brazil's record-low interest rate environment may also
prompt the country to issue a benchmark bond with a maturity of
more than 10 years.
    Chile's peso traded sideways. Prices of copper, the
country's largest export, are expected to climb this year amid
increased global demand and problems with supply, a Reuters poll
showed. 
    Sao Paulo stocks bounced back from their worst
session in 10 months, with energy stocks serving as the biggest
boost to the index. 
    Brazilian airline Azul SA jumped 8%, to the top
of the Bovespa index, as it hoped to sublease 53 Embraer E195
jets to Poland's LOT and U.S.-based Breeze Aviation Group.
    
    Mexican stocks recovered after marking their worst
session in more than a year on Monday.
    The MSCI's index of regional equities jumped 2.2%, its best
gain in nearly four weeks.
    
    Key Latin American stock indexes and currencies at 1911 GMT
    
    Stock indexes             Latest    Daily % change
 MSCI Emerging Markets         1101.88             -0.1
                                        
 MSCI LatAm                    2846.94             2.19
                                        
 Brazil Bovespa              116479.97             1.75
                                        
 Mexico IPC                   44676.98             1.23
                                        
 Chile IPSA                    4570.44             0.19
                                        
 Argentina MerVal             40683.70            2.725
                                        
 Colombia COLCAP               1621.97            -0.12
                                        
                                                       
       Currencies             Latest    Daily % change
 Brazil real                    4.1953             0.32
                                        
 Mexico peso                   18.7411             0.87
                                        
 Chile peso                      788.4            -0.10
                                        
 Colombia peso                    3391             0.23
 Peru sol                        3.338            -0.21
                                        
 Argentina peso                60.1750            -0.01
 (interbank)                            
                                        
 
    
    

 (Reporting by Ambar Warrick in Bengaluru; editing by Jonathan
Oatis)
  
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