July 6, 2020 / 8:03 PM / in a month

EMERGING MARKETS-Brazil, Chile stocks hit 4-month highs on China recovery hopes

    * Colombian peso at near 1-month high
    * Chile's peso supported by copper prices
    * Argentine risk index falls after new bond plan

 (Updates prices, adds comments)
    By Ambar Warrick and Shreyashi Sanyal
    July 6 (Reuters) - Most Latin American currencies and stocks
strengthened on Monday as strong economic data through last week
spurred sustained bets on a swift post-coronavirus recovery.
    Risk appetite was bolstered by a rally in Chinese equities
and the yuan, with the latter touching a 3-1/2 month
peak amid improving economic readings in the world's
second-largest economy. 
    Chile's peso was among the best-performing currencies
in the region, as the prices of copper, the country's largest
export, surged on the prospect of improving Chinese demand.

    Copper prices had also risen on concerns over disruptions to
Chilean supply from the COVID-19 pandemic.
    "With LatAm becoming the global epicenter for Covid-19
cases, the supply narrative has grown louder of late, as the
market recognizes that multinational miners may continue to
enforce social distancing practices that could hamper current or
future output until the contagion is clearly remedied," analysts
at TD Securities wrote in a note.
    Chilean stocks rose 2.2% to a four-month high,
outperforming regional peers, while the MSCI's index of Latam
equities added 1.5%.
    Chilean President Sebastian Pinera on Sunday announced a
$1.5 billion package of measures to help keep the country's
ailing middle class afloat as the coronavirus pandemic continues
to ravage the economy.
    Economic recovery in China also stands to benefit Latin
American markets, given their large agriculture and basic
resources exports to the country.    
    The oil-sensitive currencies of Mexico and Colombia
 extended gains from the prior week, underpinned by recent
strength in the crude market. Colombia's peso was near a
one-month high, while the Mexican peso scaled a more than
two-week peak.
    Brazil's real fell 0.5%, while stocks added
about 1.8%, touching their highest level since early March.  
    Spiking coronavirus cases across Latin America prompted some
caution, with the number only set to grow as economies in the
region slowly scale back lockdown measures.
    Analysts at Capital Economics said even if lockdown measures
were to be eased further, with the virus continuing to spread,
Latin America's economic outlook will still be much worse than
in places which have already controlled the virus.
    Argentina's peso was muted. The country's risk index
fell after the government unveiled an improved debt
restructuring offer to creditors.
    Argentina set a deadline of August 4 for creditors to accept
the new deal, which increases coupons and includes a bond to
account for accrued interest on the treasuries covered by the
pact.
    Argentine risk assets had lagged over the past week due to
uncertainty surrounding any deal.
    
    Key Latin American stock indexes and currencies at 1937 GMT:
       Stock indexes                 Latest         Daily %
                                                    change
 MSCI Emerging Markets                  1059.39           2.55
                                                 
 MSCI LatAm                             1982.13           1.54
 Brazil Bovespa                        98520.14           1.81
 Mexico IPC                            37886.61          -0.17
 Chile IPSA                             4296.10           2.24
                                                 
 Argentina MerVal                      43411.22          9.188
 Colombia COLCAP                        1128.38           0.28
                                                 
                                                              
          Currencies                 Latest         Daily %
                                                    change
 Brazil real                             5.3452          -0.52
                                                 
 Mexico peso                            22.3480           0.19
                                                 
 Chile peso                               799.1           0.41
 Colombia peso                          3635.75           0.23
 Peru sol                                3.5438          -0.14
                                                 
 Argentina peso (interbank)             70.8100          -0.24
                                                 
 Argentina peso (parallel)                  123           3.25
                                                 
 

 (Reporting by Shreyashi Sanyal and  Ambar Warrick in Bengaluru;
Editing by Dan Grebler and Chizu Nomiyama)
  
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