May 5, 2020 / 7:51 PM / a month ago

EMERGING MARKETS-Latam assets propped up by commodity gains; Brazil's real lags

    * Brazilian industrial output plummets in March
    * Chilean peso touches highest level since late March
    * Argentine debt negotiations in focus

 (Adds comment, updates prices)
    By Susan Mathew and Ambar Warrick
    May 5 (Reuters) - Most Latin American stocks and currencies
rose on Tuesday as a bump in crude prices helped those with oil
exposure, while markets eyed an easing in coronavirus-related
    The Mexican peso climbed 0.4%, while Colombia's
currency jumped 1.2%, inching closer to three-week highs,
as oil prices rose on hopes of increased demand after certain
U.S. states outlined plans for reopening businesses, while
several countries tentatively eased lockdowns.
    Chile's peso touched over five-week highs as copper
prices also rose on hopes of increased demand. Copper is Chile's
main source of export revenue.
    Goldman Sachs analysts forecast a moderate pickup in Brent
crude prices from current levels in the second half of the year.
    A pickup in commodity prices would benefit Latin American
markets, which have severely underperformed their developing
world peers due to their commodity exposure and concerns over
the fiscal strength of regional economies.   
    The MSCI's index of regional equities rose
1.5%, pushed up by gains in commodity-linked stocks.
    Still, gains for the day were tempered by more weak economic
    Brazilian stocks added about 1.2%, propped up by
gains in Itau Unibanco Holding SA, the country's
largest bank. 
    The lender said first-quarter cost cuts and higher
provisions could be just the start of belt-tightening moves as
it projected a slow recovery from the coronavirus.
    Brazil's real, however, lagged its regional peers
after data showed industrial output in the country slumped 9.1%
in March.
    Goldman Sachs analysts expect Brazil's industrial sector to
suffer the headwinds of a global and domestic recession due to
the virus. 
    Brazil's lower house of congress is due for a second round
voting on extra spending and emergency measures to cushion the
economy from the pandemic's impact.
    Chilean stocks rose more than 2%, while Mexico's
benchmark index rose nearly 1%.
    Credit rating agency Moody's on Monday cut its forecast for
Mexico's economic performance in 2020 to a contraction in gross
domestic product of 7% from a contraction of 3.7% previously.

    In Argentina, Economy Minister Martin Guzman told Reuters
that even though efforts to convince bondholders to accept a $65
billion debt restructuring proposal were proving tough work, he
had no plans to extend a Friday deadline for a deal.

    Three major creditor groups reiterated their stance that
they would reject a tough offer. The negotiations, which have
hammered Argentine bonds, will determine whether the country is
able to avoid slipping into what would be its ninth default.

    Key Latin American stock indexes and currencies at 1931 GMT:
    Stock indexes             Latest        Daily % change
 MSCI Emerging Markets          896.13                    0.92
 MSCI LatAm                    1625.52                    1.56
 Brazil Bovespa               79782.81                    1.15
 Mexico IPC                   36710.80                    0.94
 Chile IPSA                    3939.17                    2.23
 Argentina MerVal             33354.49                   2.986
 Colombia COLCAP               1105.22                   -0.02
       Currencies             Latest        Daily % change
 Brazil real                    5.5960                   -1.31
 Mexico peso                   23.9700                    0.38
 Chile peso                        834                    0.26
 Colombia peso                  3930.7                    1.17
 Peru sol                       3.3878                   -0.12
 Argentina peso                67.0000                   -0.10
 (Reporting by Susan Mathew in Bengaluru; Editing by Bernadette
Baum and Tom Brown)
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