March 12, 2020 / 7:21 PM / in 20 days

EMERGING MARKETS-Latam FX hit new lows, Brazil stocks set for worst day in over 21 years

    * Mexican, Colombian, Chilean pesos at record lows
    * Brazil's Bovespa index set for worst day since Oct. 1998
    * Azul dives as it cuts international flights  

 (Adds comment, updates prices)
    By Shreyashi Sanyal
    March 12 (Reuters) - Most Latin American currencies touched
historic lows on Thursday and regional stocks nosedived after
Washington's unexpected curb on travel from Europe heightened
fears that the coronavirus pandemic would slam global growth.
    U.S. President Donald Trump on Thursday announced the 
sweeping restrictions and economic steps to counter the
pandemic's impact, but the scant details disappointed investors.

    "Instead of providing urgently required reassurance to
already terrified markets that his administration is capable of
dealing with the coronavirus, President Trump gave a speech that
reignited selling pressure across global stocks," said Piotr
Matys, senior emerging markets FX strategist at Rabobank. 
    MSCI's index for Latin American equities
tumbled 13.3%, while its index for currencies
shed 2.4%.
    Investors scrambled for the greenback as swap spreads on
major currencies blew out and the euro dropped after the
European Central Bank announced more stimulus to fight the
coronavirus impact but kept rates unchanged.
    As oil prices slid, crude exporter Mexico's peso fell
as much as 6.9% to an all-time low of 22.86 to the dollar, while
Colombia's currency gave up 4.6% to hit a new low of
4,066.13.
    Mexico's central bank said it would hold $500 million of
auctions as part of its currency hedging program on Thursday,
April 16; Friday, April 17; Wednesday, May 13; and Wednesday,
June 10.
    Brazil's real breached 5 to the dollar for the first
time. The central bank announced an auction of $2.5 billion in
the spot market. 
    "It's worth mentioning that the (Brazilian) central bank
still has ample instruments to intervene in the FX market with
international reserves amounting $362 billion at the end of Feb.
20," said EM strategists at Citi Research in a note.
    As copper prices fell to three-year lows, the currency of
the world's largest copper producer, Chile, dropped 1.2%
to an all-time low.
    Brazil's stock market was halted twice as its shares
slumped as much as 19.6%, bringing the year's losses to 47.5% in
dollar terms. Sao Paulo stocks were set for their worst day
since 1998. 
    Miner Vale shed 14%, while preferred shares of
state oil firm Petróleo Brasileiro S.A., or Petrobras
, tumbled 21%.
    Carrier Azul dove 28% after it became the first
Latin American carrier to implement a hiring freeze and put some
workers on unpaid leave as demand slumped.
    LATAM Airlines followed suit, saying it would cut
capacity on international flights by up to 30%, sending its
shares down 17%.  
    Chile's main stock index fell 5.9% to a four-year 
low.
    Mexican stocks slid 4.4% to their lowest in more than
eight years, while Colombia's COLCAP index slid 8.2%
as oil firm Ecopetrol dived almost 11%. 
    
    Key Latin American stock indexes and currencies at 1850 GMT:
    
   Stock indexes            Latest      Daily %
                                        change
 MSCI Emerging Markets         885.18      -6.49
                                       
 MSCI LatAm                   1716.60     -13.25
                                       
 Brazil Bovespa              73175.65     -14.08
                                       
 Mexico IPC                  37207.86       -3.8
                                       
 Chile IPSA                   3742.79      -5.95
                                       
 Argentina MerVal            28705.20     -8.639
                                       
 Colombia COLCAP              1190.27      -8.12
                                       
                                                
      Currencies            Latest      Daily %
                                        change
 Brazil real                   4.8550      -2.78
                                       
 Mexico peso                  21.6110      -1.07
                                       
 Chile peso                     853.8      -2.16
                                       
 Colombia peso                   4026      -3.42
                                       
 Peru sol                      3.5267      -0.28
                                       
 Argentina peso               62.8175      -0.23
 (interbank)                           
                                       
 
    
    

 (Reporting by Shreyashi Sanyal and Susan Mathew in Bengaluru
Editing by Frances Kerry and Richard Chang)
  
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