February 4, 2020 / 3:39 PM / 24 days ago

EMERGING MARKETS-Latam assets rise as China's measures ease virus worries

    * Markets hopeful on China's stimulus efforts 
    * Brazilian stocks rise, Petrobras boosts
    * Chilean peso, stocks gain as copper prices bounce 
    * Colombian peso tracks recovery in oil prices 

    By Shreyashi Sanyal
    Feb 4 (Reuters) - Latin American assets gained steadily on
Tuesday, recovering slightly for the second straight session as
China eased some fears around the coronavirus epidemic by adding
liquidity to markets.
    The People's Bank of China said it was injecting 1.2
trillion yuan ($174 billion) worth of liquidity into the markets
via reverse repo operations on Monday.
    "Investors seem to be reacting positively to the steps
currently being taken by Chinese authorities," said Art Hogan,
chief market strategist at National Securities in New York. 
    The well-received news from China, one of Latin America's
biggest export destinations, helped push a basket of stocks in
the region up 1.8%. 
    Markets have been spooked by the virus outbreak in China,
which has killed more than 420 people and raised fears of its
impact on the global economy. 
    "We believe the short-term growth and earnings impact from
the coronavirus may prove to be significant, but will also
likely prove temporary, with pent-up demand spurring a sharp
recovery in growth later in the year," Mark Haefele, chief
investment officer at UBS Global Wealth Management, wrote in a
note. 
    Sao Paulo stocks gained 1.4%, with state-run oil and
gas explorer Petrobras offering one of the biggest
boosts as it said a strike by workers has not yet affected
production or jeopardized safety across the company's
operations.
    Shares in Brazil's Gol rose as much as 5.5% after
the budget airline said it had signed a codeshare agreement with
American Airlines.
    Brazil's real also firmed, with investors awaiting
more clues on the direction of monetary policy in Latin
America's biggest economy on Wednesday. 
    A Reuters poll of economists showed Brazil's central bank on
Wednesday will add a modest amount of monetary stimulus to
support a still-sluggish recovery, having already made four
deeper cuts to its benchmark rate in the second half of 2019.

    MSCI's index for Latin American currencies
also rose on the day, with the Colombian peso leading
gains. 
    Colombia's currency strengthened 1% against the dollar, as
price of oil, the country's main export, rebounded on hopes for
additional production cuts from OPEC. 
    The Chilean peso firmed for the second straight day,
tracking a recovery in copper prices. Investors also took
comfort from upbeat economic data on Monday from the world's top
copper producer. Chilean stocks jumped nearly 2%. 
      
    
    Key Latin American stock indexes and currencies at 1514 GMT
    
   Stock indexes            Latest    Daily % change
 MSCI Emerging Markets       1085.37            2.36
                                      
 MSCI LatAm                  2830.98            1.53
                                      
 Brazil Bovespa            116112.86            1.29
                                      
 Mexico IPC                 44927.46            1.86
                                      
 Chile IPSA                  4671.59            2.01
                                      
 Argentina MerVal           42627.53           2.527
                                      
 Colombia IGBC               1635.55            0.64
                                      
                                                    
      Currencies            Latest    Daily % change
 Brazil real                  4.2451            0.07
                                      
 Mexico peso                 18.7019            0.57
                                      
 Chile peso                   781.38            0.66
                                      
 Colombia peso                3362.8            0.91
                                      
 Peru sol                     3.3598            0.33
                                      
 Argentina peso              60.5400           -0.12
 (interbank)                          
                                      
 
    

 (Reporting by Shreyashi Sanyal and Medha Singh in Bengaluru)
  
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