March 13, 2020 / 7:03 PM / in 3 months

EMERGING MARKETS-Latam FX claw higher, stocks suffer worst week since financial crisis

    * MSCI's Latam stocks index sheds 20% 
    * Major currencies step off record lows 
    * Brazil stocks jump as much as 15.4% 

 (Adds comments, updates prices)
    By Shreyashi Sanyal and Susan Mathew
    March 13 (Reuters) - Latin American currencies rose on
Friday, moving up from all-time lows as expectations of more
central bank stimulus and government spending lifted the mood
after worries over the coronavirus outbreak drove a brutal
sell-off this week.
    As an increasing number of central banks across the globe
made generous liquidity injections into markets and governments
ramped up fiscal measures amid virus containment efforts, hopes
of more policy moves helped support risk sentiment. 
    A recovery in oil prices saw Colombia's peso rise
0.2%, while Mexico's peso gained 0.1%. 
    A crash in crude prices on Monday set off alarm bells about
its impact on emerging market economies.
    "Colombia will suffer from depressed investment and tighter
fiscal policy," said William Jackson, chief emerging market
economist at Capital Economics in London. 
    "And while Mexico's economy is no longer a net oil exporter,
concerns about the impact of low oil prices on Pemex's balance
sheet have put the peso under pressure and caused bond spreads
to widen," Jackson added.     
    Pemex, Mexico's state-run oil firm Petroleos Mexicanos, is
Latin America's most indebted firm and reported one of its
worst-ever losses last year.  
    MSCI's index for Latin American stocks
jumped 8.5%, but lost 20.7% this week, its worst weekly fall
since October 2008. 
    Brazil's real, gave back gains from earlier in the
session, to trade 0.6% lower against the dollar.
    Brazil will unveil measures in the next few days to combat
the economic fallout from the virus, Economy Minister Paulo
Guedes said on Friday, adding that all steps that don't affect
the country's fiscal position would be considered.
    As copper prices rose, Chile's peso gained 1.3%.
    Markets sold off this week on fears that measures to contain
the pandemic will cause a significant economic slowdown in
United States and Europe. 
    On the week, Colombia's currency in on course for its worst
performance since 2008, and the Mexican peso since late 2016.   
    All eyes are on the U.S. Federal Reserve's policy meeting
next week with a 75-basis-point cut in the U.S. central bank's
key overnight lending rate already priced in. 
    With all of its companies gaining ground, Sao Paulo's
Bovespa stock index surged as much as 15.4% before
paring the gains to trade 7% higher. The index lost 14.8% on
Thursday and is still on track to end the week around 20% lower
- its sharpest fall since the 2008 global financial crisis.     
    Key Latin American stock indexes and currencies at 1835 GMT:
   Stock indexes             Latest       Daily %
 MSCI Emerging Markets           886.65         0.4
 MSCI LatAm                     1826.04        8.48
 Brazil Bovespa                79354.65        9.33
 Mexico IPC                    38035.42        3.82
 Chile IPSA                     3784.81        1.53
 Argentina MerVal              28380.30         0.1
 Colombia COLCAP                1174.31           0
      Currencies             Latest       Daily %
 Brazil real                     4.8145       -0.63
 Mexico peso                    21.9290       -0.13
 Chile peso                       838.2        1.86
 Colombia peso                  4021.13        0.12
 Peru sol                          3.52        0.19
 Argentina peso                 62.8975       -0.12

 (Reporting by Shreyashi Sanyal and Susan Mathew in Bengaluru;
Editing by Paul Simao and Daniel Wallis)
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