EMERGING MARKETS-China stimulus boosts Latam markets, real flat ahead of rate decision

    * 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 

 (Adds details, updates prices)
    By Sruthi Shankar
    Feb 4 (Reuters) - Most Latin American currencies and stocks
extended recovery on Tuesday, as China's efforts to cushion the
impact of coronavirus outbreak encouraged buying of risky,
emerging market assets.
    Investors returned from a local holiday to drive the Mexican
peso 0.6% higher, while the Chilean peso climbed
to its highest level in a week against the dollar as copper
prices bounced. 
    Colombia, highly dependent on oil as an export and source of
tax revenue, saw its peso gain 1% as crude prices
rebounded briefly earlier in the day.
    Markets have been spooked by the virus outbreak in China,
which has killed more than 420 people, disrupted travel and
business operations globally, and prompted economists' to cut
expectations for global growth.
    In a bid to restore market confidence, 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 and Tuesday.
    The news from China, one of Latin America's biggest export
destinations, helped push a basket of stocks in the region
 up 1.3%.
    "Our early assessment is that the hit to global growth will
be short-lived – as such we expect pressure on EM FX to subside
as the year rolls on," Nafez Zouk, global macro strategist at
Oxford Economics, wrote in a note.
    "So far, it looks like EM FX, particularly commodity-linked,
is going to take the hit over the next few weeks and possibly
    Brazil's real was largely flat, with investors
awaiting clues on the path of interest rates in Latin America's
biggest economy. 
    A Reuters poll of economists showed Brazil's central bank on
Wednesday will reduce the key Selic rate by 25 basis points,
taking it to a record low of 4.25% to support a still-sluggish
recovery, having already made four deeper cuts in the second
half of 2019.   
    Sao Paulo stocks gained 0.9%, with state-run oil
firm Petrobras offering one of the biggest boosts as
it said a strike by workers had 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.
    Argentina's 2021 bond gained as Buenos Aires
province narrowly averted falling into default, saying it would
make a $277 million payment on the bond after creditors would
not grant a last-minute approval to delay it.
    Key Latin American stock indexes and currencies at 2008 GMT:
        Stock indexes                 Latest    Daily % change
 MSCI Emerging Markets                 1085.78             2.4
 MSCI LatAm                            2823.57            1.26
 Brazil Bovespa                      115622.92            0.87
 Mexico IPC                           45079.53             2.2
 Chile IPSA                            4669.25            1.96
 Argentina MerVal                     41038.38          -1.296
 Colombia COLCAP                       1646.31             1.3
           Currencies                 Latest    Daily % change
 Brazil real                            4.2565            0.03
 Mexico peso                           18.6902            0.64
 Chile peso                              781.3            0.67
 Colombia peso                          3360.1            0.99
 Peru sol                                3.362            0.27
 Argentina peso (interbank)            60.5800           -0.18
 (Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru
Editing by Nick Zieminski)