* Brazil stocks fall over 1%, real hits record low * WHO declares coronavirus global health emergency * China's measures to contain virus will be effective - analyst * Chilean stocks gain on upbeat economic data By Sagarika Jaisinghani and Ambar Warrick Jan 31 (Reuters) - Brazilian equities shed over 1% on Friday, while the real hit a new record low, as investors grew anxious about economic growth after the China coronavirus outbreak was declared a global health emergency. A basket of Latin American stocks was down 1.6%, eyeing its biggest weekly decline in over five months, while its counterpart tracking regional currencies was off about 0.2%. The coronavirus epidemic, which first emerged in China's Hubei province, has now spread to 23 countries and has claimed over 200 lives, prompting travel restrictions from the United States and other countries. Although the World Health Organization declared the virus a global emergency on Thursday, it opposed restrictions on travel and trade with China and praised Beijing's efforts to contain the outbreak. "We believe China's aggressive measures to contain the virus will ultimately prove effective," said Mark Haefele, chief investment officer at UBS Global Wealth Management. "In our base case, we expect the outbreak of the virus not to cause a global economic slowdown and as such risk assets should stay well supported over the next six months." Still, risk appetite was dented on Friday after several businesses said they were facing supply problems because of the virus, with the travel, tourism and retail sectors being hit particularly hard. The Brazilian stock index was on course for its first monthly decline in five, also pressured by sluggish economic growth. The real, which has eased for three days in a row, hit an all-time low of 4.2791 to the dollar. "The main sign that (the real) could be oversold is a strong devaluation since the coronavirus outbreak," said Wilson Ferrarezi, economist at TS Lombard in Sao Paulo. The Brazilian central bank cut interest rates aggressively last year in order to kick-start the economy. A new Reuters poll on Friday showed economists expected the bank to cut rates again when it meets next week. Predictions of the rate cut were also making Brazil's currency less attractive for a carry trade, Ferrarezi added. The Chilean peso, which is sensitive to fluctuations in copper, eased 0.2% as prices of the red metal remained near five-month lows on worries about demand from its top consumer, China. In a bright spot, Chilean equities added about 0.4%, as data showed manufacturing production rose for a second straight month in December, bucking dire predictions of a slump in output following nearly two months of protests. The Argentinian MerVal was down about 0.4%, while Colombian equities fell 0.2%. Key Latin American stock indexes and currencies at 1515 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1060.99 -1.1 MSCI LatAm 2757.73 -1.55 Brazil Bovespa 113543.46 -1.72 Mexico IPC 44464.10 -0.89 Chile IPSA 4570.81 0.44 Argentina MerVal 40243.85 -0.374 Colombia COLCAP 1635.39 -0.17 Currencies Latest Daily % change Brazil real 4.2734 -0.37 Mexico peso 18.8850 -0.60 Chile peso 797.9 -0.20 Colombia peso 3422.21 -0.39 Peru sol 3.3758 -0.32 Argentina peso 60.3200 -0.11 (interbank) (Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Andrea Ricci)
Our Standards: The Thomson Reuters Trust Principles.