U.S. markets closed

EMERGING MARKETS-Bovepsa gains on strong earnings, ebbing coronvarius concerns

By Sruthi Shankar

* Real down despite central bank guidance on intervention * Strong U.S. data boosts dollar; Fed view of rates unchanged * Electric motor maker WEG SA jumps after results (Updates prices) By Sruthi Shankar Feb 19 (Reuters) - A batch of strong company results and a decline in the number of new coronavirus cases in China lifted Brazilian shares on Wednesday, although the real weakened for a third session. With Wall Street indexes hitting new record highs, an index of Latin American equities rose 0.6% as the tally of newly reported cases in China fell for a second day to the lowest since January. The Bovespa gained 1.2%, with WEG SA, Latin America's largest maker of electric motors, leading gains after reporting better-than-expected quarterly earnings. Planemaker Embraer rose 2% after the value of its future firm orders rose modestly to $16.8 billion in the fourth quarter, while meatpacker JBS gained 3.8% after saying it has agreed to acquire production facilities from Empire Packing Co, as well as the Ledbetter brand for $238 million. However, the real was down 0.2% at 4.3640 per dollar, hovering near an all-time low even as Brazil's central bank president, Roberto Campos Neto, said on Tuesday the bank stands ready to intervene again to address illiquidity, excessive market moves or currency weakness. But he also stressed that the real has a free-floating exchange rate. With interest rates at a record low, the real fell to an all-time low of 4.38 per dollar last week, prompting the central bank to intervene in the foreign exchange swaps market. "I think the central bank is in a tricky situation where perceived higher power to intervene has dropped and at the same time cutting rates reduces the power they may have," said Koon Chow, an emerging markets macro and FX strategist at UBP. "Generally low rates are hurting the real. They (central bank) pushed it more aggressively than anyone else." Economists have cut 2020 growth expectations for Brazil following a string of weak data amid worries the coronavirus outbreak will dent growth in China - the South American country's largest trading partner. The Colombian peso gained half a percent as oil prices jumped on easing concerns about the coronavirus outbreak and a U.S. move to take more Venezuelan crude out of the market. Other currencies in the region were subdued, with the dollar gaining momentum after strong U.S. data. Minutes from the U.S. Federal Reserve's last policy meeting showed policymakers were cautiously optimistic about their ability to hold interest rates steady this year even as they acknowledged new risks due to the coronavirus outbreak. Meanwhile, investors are awaiting word from the International Monetary Fund about the sustainability of Argentina's debt and whether official meetings would result in a recommendation for a steep debt restructuring. Argentine bond prices have stumbled 3.5% lower so far this year as uncertainty rises about the country's ability to pay $44 billion to the IMF and tens of billions of dollar more to private bondholders. Key Latin American stock indexes and currencies at 2001 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1103.33 0.7 MSCI LatAm 2778.84 0.57 Brazil Bovespa 116364.70 1.21 Mexico IPC 44854.17 -0.27 Chile IPSA 4519.19 -0.54 Argentina MerVal 38423.36 0.698 Colombia COLCAP 1669.97 0.28 Currencies Latest Daily % change Brazil real 4.3651 -0.22 Mexico peso 18.5545 0.18 Chile peso 798.8 -0.24 Colombia peso 3382.5 0.56 Peru sol 3.381 0.03 Argentina peso (interbank) 61.7250 -0.10 (Reporting by Sruthi Shankar in Bengaluru; editing by Jonathan Oatis)