July 15, 2020 / 2:34 PM / in a month

EMERGING MARKETS-Latam stocks hit one-month high as vaccine hopes fuel risky bets

    By Shreyashi Sanyal
    July 15 (Reuters) - A gauge for Latin American shares
touched its highest level in one month on Wednesday as signs of
progress in developing a coronavirus vaccine helped bring risk
appetite back into the market, with currencies rising against a
weaker dollar. 
    MSCI's index for Latin American stocks
jumped as much as 3.3%, on track for its best day since early
June, while its index for currencies gained
1.7%. 
    Markets were optimistic after Moderna Inc said on
Tuesday, its experimental vaccine for COVID-19 was safe and
provoked immune responses in all 45 healthy volunteers in an
ongoing early-stage study.
    "Hopes that a COVID-19 vaccine may be inching closer to
reality have fueled a solid rebound in risk appetite today. In
line with this, the USD is weaker this morning against all G10
and most EM currencies," said Ned Rumpeltin, European head of FX
strategy at TD Securities. 
    Currencies of oil exporters Mexico and Colombia
 were higher on rising crude prices, even as geopolitical
tensions flared.
    U.S. President Donald Trump ordered an end to Hong Kong's
special status under U.S. law to punish China for what he called
"oppressive actions" against the former British colony,
prompting Beijing to warn of retaliatory sanctions.
    Brazil's real fell 0.3%, as investors remained
cautious of the coronavirus spreading rapidly through the
country and anticipated further cuts in the benchmark lending
rate next month. 
    Sao Paulo stocks jumped amid broader market optimism
even as Vale SA fell 1.2% after a Brazilian court
ruled that the miner must present 7.9 billion reais ($1.47
billion) in guarantees by July 23 related to last year's
Brumadinho dam disaster.    
    Chile's peso firmed against the dollar, with local
investors closely tracking headlines around a bill moving
through congress to allow citizens to withdraw 10% of their
pensions in the country's Pension Fund Administrators (AFP)
system.
    Chilean President Sebastian Pinera on Tuesday widened
emergency support for middle-class citizens hit by the
coronavirus-led economic shutdown to head off legislation that
would allow withdrawals from the country's private pension
funds.    
    A Reuters poll showed a historic recession in Latin America
will likely drag on before Brazil, the region's No. 1 economy,
starts fixing a dire budget shortfall that tops the list of
threats along with the persistent coronavirus pandemic.
 
    Key Latin American stock indexes and currencies;
    
    Stock indexes               Latest      Daily % change
 MSCI Emerging Markets             1065.26            0.54
                                            
 MSCI LatAm                        1989.64            1.86
                                            
 Brazil Bovespa                  101067.81            0.62
                                            
 Mexico IPC                       36595.06            1.12
                                            
 Chile IPSA                        4133.65           -1.13
                                            
 Argentina MerVal                     0.00               0
                                            
 Colombia COLCAP                   1146.02            0.13
                                            
                                                          
        Currencies              Latest      Daily % change
 Brazil real                        5.3590           -0.24
                                            
 Mexico peso                       22.3374            0.47
                                            
 Chile peso                          786.7           -0.10
                                            
 Colombia peso                      3604.5            0.50
 Peru sol                           3.4948            0.09
                                            
 Argentina peso                    71.3500           -0.07
 (interbank)                                
                                            
 Argentina peso (parallel)             123            3.25
                                            
 

 (Reporting by Shreyashi Sanyal in Bengaluru
Editing by Alistair Bell)
  
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