March 11, 2020 / 7:34 PM / 18 days ago

EMERGING MARKETS-Latam assets slammed as pandemic tag weighs

    * WHO describes coronavirus outbreak as pandemic 
    * MSCI's Latam stocks index hits near 4-year low 
    * Brazil lowers 2020 GDP forecast 
    * Colombian peso hits fresh record low

 (Adds comments, updates prices)
    By Shreyashi Sanyal
    March 11 (Reuters) - Latin American stocks and currencies
were sold off heavily on Wednesday after the World Health
Organization classified the coronavirus outbreak as a pandemic,
exacerbating fears of its hit to global growth.
    The WHO said there are more than 118,000 cases in 114
countries and 4,291 people have died due to the fast-spreading
    MSCI's index for Latin American currencies
tumbled 9.7% to its lowest level since March 2016, while its
currencies index dropped 1.6%. 
    Most regional currencies lost between 0.4% and 3.3% against
the dollar - also pressured by an oil price war between Russia
and Saudi Arabia, which left investors scurrying to the safety
of the Japanese yen and the Swiss franc.  
    "I think that emerging market currencies are really a direct
function of growth. So the weaker we think growth is going to
be, the more likely you are to see some continued pressure on
currencies," said Jeff Grills, head of emerging markets debt at
Aegon Asset Management.   
    After a bruising sell-off on Monday, emerging markets assets
had risen in the previous session after U.S. President Donald
Trump said "major steps" would be taken to salvage markets. The
lack of major announcements since has disappointed, however.
    Hopes of global stimulus were kept alive by the Bank of
England, which cut rates by 50 basis points and introduced a
slew of other measures before unveiling an $30 billion economic
stimulus plan.
    Investors will now look to what the European Central Bank
will decide to do on Thursday.      
    Oil exporter Colombia's peso tumbled 3.4%, hitting a
fresh record low, while Mexico's peso fell 2.4%, as crude
prices resumed their decline.     
    Pemex, as Mexico's state-run oil firm Petroleos Mexicanos is
commonly known, is Latin America's most indebted firm and
reported one of its worst-ever losses last year. Fitch
downgraded it last year and it faces threat of downgrade by S&P
and Moody's.
    Brazil's real declined 2.1% as the country cut its
2020 GDP growth forecast while doubling down on its strict
fiscal discipline and orthodox economic reform agenda as the
best way to navigate the increasingly challenging economic
    "The real will continue to weaken as long as people's growth
expectations continue to weaken," Grills added.     
    Brazil's Bovespa's 11.5% fall led declines among
regional stocks, while Chile stocks lost 2.3% to hover
near 3-1/2 year lows.     
    Key Latin American stock indexes and currencies at 1904 GMT:
  Stock indexes           Latest     Daily % change
 MSCI Emerging Markets      942.17              -2.32
 MSCI LatAm                1908.10              -9.66
 Brazil Bovespa           81629.23             -11.48
 Mexico IPC               38487.88              -2.72
 Chile IPSA                3978.43              -2.26
 Argentina MerVal         31127.43             -5.193
 Colombia COLCAP           1300.77              -4.37
      Currencies          Latest     Daily % change
 Brazil real                4.7466              -2.15
 Mexico peso               21.3740              -2.48
 Chile peso                  835.4               0.22
 Colombia peso             3889.69              -3.26
 Peru sol                   3.5168              -0.46
 Argentina peso            62.6675              -0.12

 (Reporting by Shreyashi Sanyal and Susan Mathew in Bengaluru;
Editing by Marguerita Choy and Sonya Hepinstall)
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