February 21, 2020 / 7:01 PM / 2 months ago

EMERGING MARKETS-Latam currencies gain as U.S. data hits dollar, virus fears hurt stocks

 (Updates prices)
    * Dollar slumps after weak U.S. business activity data
    * Brazil's real comes off all-time low
    * Vale posts surprise loss, slams Sao Paulo stocks 
    * Brazil, Argentina to remain shut until Wednesday

    By Susan Mathew
    Feb 21 (Reuters) - Most Latin American currencies firmed on
Friday, reversing course from earlier in the session as the
dollar took a hit from data that showed business activity in the
United States stalled in February.
    Brazil's real came off all-time lows to rise for the
first time in five sessions, up 0.2%. Over the week, the
currency lost around 2% in its seventh weekly loss in eight.  
    Crude exporter Colombia's peso rallied 0.7%, despite
falling oil prices, while higher copper prices helped the
Chilean peso recover from a 1.4% slide in the previous
session.
    Mexico's peso traded 0.1% lower but was well off the
day's lows, when it hit a two-month trough against the
greenback. 
    The dollar slumped after a survey of purchasing
managers showed U.S. business activity in the manufacturing and
services sectors stalled in February as companies have grown
increasingly concerned about the coronavirus.
     "The PMIs tentatively suggest that our first-quarter growth
forecasts will prove too optimistic," said Simon Macadam, global
economist at Capital Economics, suggesting more pain may in
store for risk assets as investors reassess global growth
expectations. 
    Regional stocks fell, in line with a
downturn in global stocks, as investors worried about a
prolonged impact from the virus as China reported an uptick in
cases and the number doubled in South Korea, while more than 80
people tested positive for the virus in Japan.
    "The concern is that up till now this has been a China
problem, but now there is increasing concern that it is moving
to South Korea and Japan," said Jonathan Bell, chief investment
officer at Stanhope Capital. 
    Brazilian stocks lost more than 1% as iron ore miner
Vale SA slipped almost 4% after reporting an
unexpected quarterly loss.
    Vale severely missed quarterly profit and margin estimates, 
largely due to impairments related to its base metal and coal
operations and the lingering effects of a deadly dam burst in
January 2019.      
    Colombia's benchmark COLCAP index slid 2.7% in its
worst day in two years. Oil major Ecopetrol fell 0.4%,
tracking oil prices lower. 
    Brazil and Argentina geared up for an extended weekend on
account of the carnival festival, with markets set to reopen on
Wednesday. 
           
    Key Latin American stock indexes and currencies at 1843 GMT:
   Stock indexes            Latest    Daily %
                                      change
 MSCI Emerging Markets       1083.25     -1.1
                                      
 MSCI LatAm                  2697.72     -1.2
                                      
 Brazil Bovespa            113098.44     -1.3
                                      
 Mexico IPC                 44790.75     0.04
                                      
 Chile IPSA                  4538.08     0.04
                                      
 Argentina MerVal           38578.89   -0.982
                                      
 Colombia COLCAP             1623.81    -2.74
                                      
                                             
       Currencies           Latest    Daily %
                                      change
 Brazil real                  4.3870     0.09
                                      
 Mexico peso                 18.8560    -0.15
                                      
 Chile peso                    802.3     0.54
                                      
 Colombia peso                  3378     0.69
 Peru sol                      3.385     0.18
                                      
 Argentina peso              61.8375    -0.08
 (interbank)                          
                                      
 
 (Reporting by Shreyashi Sanyal and Susan Mathew in Bengaluru
Editing by Marguerita Choy and Tom Brown)
  
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