EMERGING MARKETS-Latam stocks, FX caught in coronavirus-fueled rout
* Mexican peso touches lowest level in 11 weeks * Slide in oil prices hits Colombian peso * Brazil, Argentina shut for carnival festival (Updates prices, adds comments) By Susan Mathew and Shreyashi Sanyal Feb 24 (Reuters) - Latin American currencies and stocks were caught in a global sell-off on Monday as investors steered clear of risky bets after a jump in the number of coronavirus cases outside China exacerbated global growth worries. Fears of a pandemic rose after Italy, South Korea and Iran reported a sharp rise in the number of new infections and deaths, while other Middle Eastern countries also reported new cases. "The spread of the virus outside of China... combined with continued heavy restrictions within China, challenges the assumption that the outbreak will blow over with only limited damage to the global economy," said Jonas Goltermann, senior economist at Capital Economics. With markets in Brazil and Argentina closed for local holidays until Tuesday, MSCI's index of Latam currencies fell 0.3%, while its stocks counterpart slipped 1.2%, on course for its third straight session of losses. Mexico's peso slipped 0.8%, touching an 11-week low early in the session, set for its a third straight session of declines. Mexican stocks fell 2.5% to their lowest in almost two months. Mexican consumer price inflation came in slightly below forecasts in the first half of February but remained above the central bank's target rate, data showed on Monday. Markets had reflected intermittent sparks of optimism over the last two weeks on hopes that the coronavirus outbreak might pass over by April, with falling numbers of new cases in China lending weight to that assessment. But fears have increased that the virus will continue to spread, leading to more travel curbs and suspended activity at factories and retail outlets, causing a broader hit to global supply and demand. "The market is still looking at the base-case of a V-Shape - a steep slump and a sharp recovery. But the fact is that people still don't have a handle on how bad this can get," said Win Thin, head of emerging market currency strategy at Brown Brothers Harriman. A nearly 4% slide in oil prices knocked Colombia's peso lower, putting it on track for its steepest one-day drop since November. The International Monetary Fund on Friday trimmed Colombia's growth estimate for the year, saying the country needs a more durable fiscal adjustment to meet its financial targets. It added that the central bank should increase reserves to protect against external shocks. Chile's currency gave up 1% as prices of copper fell on the London Metals Exchange. Santiago-listed stocks slumped 2% to their lowest in more than three months. Key Latin American stock indexes and currencies at 1943 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1055.40 -2.66 MSCI LatAm 2674.52 -1.2 Mexico IPC 43695.6 -2.47 5 Chile IPSA 4430.63 -2.25 Colombia COLCAP 1609.56 -1.34 Currencies Latest Daily % change Mexico peso 19.0587 -0.86 Chile peso 808.1 -0.72 Colombia peso 3433.5 -1.62 Peru sol 3.404 -0.56 (Reporting by Susan Mathew and Shreyashi Sanyal in Bengaluru; Editing by Dan Grebler)
