EMERGING MARKETS-Brazil's real hits fresh low, lags steady Latam markets

Sruthi Shankar

* Real under pressure from weak retail sales data

* Bovepsa lifted by batch of earnings updates

* IMF set to begin debt talks with Argentina

(Updates prices) Feb 12 (Reuters) - The Brazilian real slid to a fresh record low on Wednesday after data showed the country's retail sales dropped unexpectedly in December, while broader Latin American markets gained on hopes the coronavirus outbreak in China has peaked. The real fell as much as 0.5% to 4.3526, making it one of the worst-performing currencies in the world against the dollar this year, down almost 8%. The Brazilian currency has been pressured by slow overseas demand for Brazilian assets with interest rates at a record low. Data showed Brazilian retail sales fell 0.1% in December, the first decline in eight months and another sign that consumer spending in Latin America's No. 1 economy will not power growth.

"We think there is more weakness to come especially considering that the BCB has so far made no hints that it stands ready to intervene," analysts at Oxford Economics wrote in a client note, referring to Brazil's central bank. They added that there is still room to go before the real crosses into oversold territory. Other currencies in the region recovered as China reported its lowest number of new coronavirus cases since late January, supporting its senior medical adviser's prediction that the outbreak might end by April. The Colombian peso rose 1%, aided by a jump in crude prices. The Mexican peso was up 0.2% ahead of a central bank meeting on Thursday when it is expected to cut its key interest rate by 25 basis points to 7%. In equity markets, Sao Paulo-listed shares jumped 1.5%, with education company Cogna Educação SA leading gains after it raised 2.5 billion reais ($577 million) in a share offering. Wireless carrier TIM Participações SA rose 4% after it posted better-than-expected quarterly income, helped by higher customer spending. The International Monetary Fund was set to start talks with Argentina about economic policy, with the local bond market muddled after a failed debt auction and unilateral reprofiling of principal payments this week. On Tuesday, Argentina decided to postpone a $1.47 billion principal payment on its AF20 bond until Sept. 30, after two attempts to roll over the bond attracted low investor participation. The government says it needs to rejig $100 billion in debt, including $44 billion in loans to the fund, Argentina's biggest single creditor.

Key Latin American stock indexes and currencies at 1946 GMT:

Stock indexes Latest Daily %


MSCI Emerging Markets 1110.01 0.96MSCI LatAm 2818.15 1.04Brazil Bovespa 117152.35 1.54Mexico IPC 45453.24 0.95Chile IPSA 4667.90 0.16Argentina MerVal 40067.84 0.611Colombia COLCAP 1659.88 0.89Currencies Latest Daily %


Brazil real 4.3508 -0.42Mexico peso 18.6200 0.18Chile peso 790 0.19Colombia peso 3386 0.96Peru sol 3.378 0.27Argentina peso (interbank) 61.2275 -0.18

(Reporting by Sruthi Shankar in Bengaluru; Editing by David Gregorio and Paul Simao)