By Shreyashi Sanyal
June 26 (Reuters) - Latin American currencies and stocks
eyed their third straight week of declines as rising coronavirus
cases in the region and globally put a question mark over the
pace of recovery from the pandemic-fueled slump.
Cases in South America continued to accelerate, with
Mexico's health ministry reporting 6,104 new confirmed cases and
736 deaths on Thursday, while the country's Finance Minister
Arturo Herrera tested positive for the virus.
Brazil remained the second largest COVID-19 hot spot in the
world, only second to the United States, which reported a record
daily rise in cases on Thursday.
The Brazilian real led declines among regional
counterparts, weakening 2.7% against the dollar.
In Latin America's biggest economy, the Federal University
of Sao Paulo (Unifesp) is in talks to test a potential
coronavirus vaccine developed by Italian
researchers.
Mexico's peso slipped 1% after data showed Mexico's
economy posted a record contraction in April, highlighting the
devastation caused by lockdowns on economic activity,
particularly in manufacturing.
The Chilean peso also fell 1%, as the world's biggest
copper miner Codelco said it was suspending refinery and foundry
operations at its sprawling Chuquicamata division to prevent
further spread of the new coronavirus.
The MSCI's index for Latin American stocks
tumbled 2.9%, while its currencies counterpart
fell 2%.
Fears of a second wave of contagion and gloomy economic
forecasts have stalled a sharp recovery for Latin American
stocks from a meltdown in March, with investors doubtful if
current stimulus measures will suffice.
"Risk assets have clearly grown comfortable ignoring the
world's gloomy fundamentals, with the IMF adding to the chorus
that's highlighting the disconnect between financial markets and
the economic outlook," said Han Tan, market analyst at FXTM.
Meanwhile, International Monetary Fund Managing Director
Kristalina Georgieva said the global economic crisis due to the
coronavirus could ultimately test the Fund's $1 trillion in
total resources, "but we're not there yet."
Key Latin American stock indexes and currencies at 1456 GMT
Stock indexes Latest Daily %
change
MSCI Emerging 998.23 -0.62
Markets
MSCI LatAm 1870.04 -2.86
Brazil Bovespa 94818.98 -1.21
Mexico IPC 37501.20 -0.62
Chile IPSA 4017.52 -0.51
Argentina MerVal 41240.61 -1.8
Colombia COLCAP 1118.52 -0.58
Currencies Latest Daily %
change
Brazil real 5.4720 -2.65
Mexico peso 23.0115 -1.59
Chile peso 819.1 -0.92
Colombia peso 3762.25 -0.85
Peru sol 3.5228 -0.57
Argentina peso 70.2100 -0.07
(interbank)
(Reporting by Shreyashi Sanyal in Bengaluru; editing by
Jonathan Oatis)
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