EMERGING MARKETS-Mexico's peso slides to 5-month low as coronavirus reaches its shores

    * Mexican peso at 19.78 to dollar
    * Mexico second country in Latam to register the virus
    * Brazil's real slips to new low
    * Chilean peso hits three-month low

    By Susan Mathew
    Feb 28 (Reuters) - The Mexican peso led Latin American
currencies lower on Friday after authorities confirmed the
country's first cases of the coronavirus as it speeds across the
globe setting off recession fears.
    The peso slumped 1.5% and touched a five-month low of
19.78 per dollar, as Mexico confirmed two cases, becoming the
second country in Latam to register the virus. This comes just
days after the central bank cut its 2020 economic growth
forecast and hiked its inflation view on virus uncertainty.
    The currency is on track to end the week with losses of
around 4% - its worst in more than three years. 
    Markets worldwide have been caught up in a rout this week
with pandemic fears heightening as the numbers of new infected
cases around the world surpassed those within mainland China, 
where the outbreak originated late in December.

    "Concerns about the potential for a global recession are
growing and rightfully so," said Mike O'Rourke, chief market
strategist at JonesTrading.
    "What was originally viewed as a temporary global supply
chain slowdown with risk to the Chinese consumer has morphed
into a global supply chain shutdown and a slowdown of the global
    Latam has been no exception to the sell-off. MSCI's index of
regional currencies is on course for its biggest weekly drop
since May 2018, while its stocks counterpart
eyes its worst week in 11-1/2 years and steepest monthly fall
since May 2018.  
    Bets are now that major central banks of the world will cut
interest rates to try and nurse economies through the troubles
and stave off a global recession.  
    Latam's first coronavirus case was confirmed in Brazil
earlier this week and the subsequent rout in Brazil assets led
to two major Wall Street banks cutting the economic growth
forecast for the country, which was already struggling with
flailing fundamentals.
    A report on Friday said Brazil's government is likely to cut
its 2020 gross domestic forecast before the end of next week. A
major commodity exporter, Brazil faces the risk from falling
demand and prices of commodities.
    Brazil's real currency slipped to new lows for a
third straight day, while the Bovespa stock index lost
1.8%, with iron ore miner Vale dragging the most.

    Adding to Mexico's woes, state oil company Petroleos
Mexicanos on Thursday said its net loss doubled in 2019. The
heavily indebted company has prompted downgrade warnings for
itself as well as Mexican sovereign ratings, with Fitch last
year downgrading Pemex debt to junk.
    Chile's peso slipped to three-month lows, but data
showing Chilean manufacturing and copper output rose in January 
helped cap declines in the currency of the world's largest
producer of the red metal.
    Key Latin American stock indexes and currencies at 1421 GMT:
   Stock indexes            Latest    Daily %
 MSCI Emerging Markets       1004.10    -2.58
 MSCI LatAm                  2378.50    -1.99
 Brazil Bovespa            101163.70    -1.77
 Mexico IPC                        -        -
 Chile IPSA                  4183.83    -1.86
 Argentina MerVal           35348.04    -0.11
 Colombia COLCAP                   -        -
       Currencies           Latest    Daily %
 Brazil real                  4.5020    -0.61
 Mexico peso                 19.7750    -1.35
 Chile peso                    816.8    -0.26
 Colombia peso               3539.06    -1.15
 Peru sol                     3.4518    -0.54
 Argentina peso              62.2000    -0.10
 (Reporting by Susan Mathew in Bengaluru;)

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