March 10 (Reuters) - Most Latin American currencies firmed on Tuesday, recovering from steep falls last session as a rebound in oil prices and hopes of stimulus buoyed sentiment. Currencies of Brazil, Chile and Colombia came off all-time lows hit last session, but still hovered near those levels. They rose between 0.8% and 1.2%. Mexico's peso gave up gains made during Asian and European trading hours of as much as 2.3%, to trade 0.5% lower even after Mexico's currency commission increased the size of its program of foreign exchange auctions to $30 billion from $20 billion. The Mexican and Colombian pesos had tumbled on Monday when oil prices crashed after Saudi Arabia sparked a price war with Russia, but a recovery in crude prices by 8% on stimulus hopes induced some calm. U.S. President Donald Trump on Monday promised "major" steps to combat the virus outbreak and said he would discuss a payroll tax cut with congressional Republicans. Markets now await Trump's news conference on Tuesday. "While fiscal stimulus will help deal with the fallout of economic dent from the virus, we are circumspect that this will have a durable impact ... This circumstance will likely only follow a breakthrough on the development of an antiviral vaccine or a leveling off in confirmed cases," said Mazzen Issa, a senior FX strategist at TD Securities. Panic remains in markets about a likely recession as the fast-spreading coronavirus has infected more than 100,000 people. "The viral outbreak has not only hit supply chains, but is turning into a demand shock. The Trump administration intends to announce a fiscal package, but with transparency in doubt over the handling of the outbreak, remaining defensive in risk is appropriate," TD Securities' Issa said. Brazil's Treasury has canceled the auction of fixed rate bonds scheduled for this week "due to more restrictive financial market conditions," it said in a statement on its website late on Monday. Sao Paulo's Bovespa stock index jumped 4.7% after posting its worst day since 1998. The rebound in oil and higher iron ore prices lifted Petrobras and Vale shares, respectively. Adding to the optimism, data on Tuesday showed Brazilian industry got the year off to a solid start, with output rising in January for the first month in three and at its fastest pace since August. Chile stocks were on course to make up almost of Monday's losses, up 3%.
Key Latin American stock indexes and currencies at 1327 GMT:Stock indexes Latest Daily %
changeMSCI Emerging Markets 961.88 1.47MSCI LatAm 2071.23 3.87Brazil Bovespa 90127.88 4.72Mexico IPC - -Chile IPSA 4151.10 2.86Argentina MerVal - -Colombia COLCAP - -Currencies Latest Daily %
changeBrazil real 4.6742 1.09Mexico peso 20.9600 -0.84Chile peso 831.5 1.20Colombia peso 3773.71 0.84Peru sol 3.4877 0.49Argentina peso - -
(Reporting by Susan Mathew in Bengaluru;)