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EMERGING MARKETS-Latam assets gain for a third session; real flat before rate decision

By Shreyashi Sanyal

* Reports of coronavirus treatment buoy risk appetite * Brazil's central bank to deliver modest rate cut -poll * Chilean peso firms as copper jumps to one-week high * Argentina's Buenos Aires averts falling into default By Shreyashi Sanyal Feb 5 (Reuters) - Latin American assets rose for a third straight session on Wednesday, as investors took comfort from China's efforts to ease the impact of a deadly virus outbreak, while Brazil's real remained rangebound ahead of a central bank decision. Beijing's tight containment measures, along with the billions of dollars pumped into markets by Chinese authorities helped investors regain appetite for riskier assets in the emerging markets space. Most emerging market assets have been hit by fears over the potential economic impact in the near-term of the fast-spreading coronavirus outbreak, which has killed nearly 500 people so far. Still, some worries were soothed following a report that a Zhejiang University team had found drugs that could inhibit the coronavirus in certain experiments. "Stock markets are positive... while gold is trending down, all driven by news on an advance on the development of 'coronavirus' vaccine, as well as improvements in the detection speed," analysts at Grupo Financiero Banorte wrote in a note. Brazil's real traded flat against the greenback as local investors awaited a decision from Latin America's no.1 economy's central bank, with expectations of a modest amount of monetary stimulus to support a still-sluggish economic recovery. The central bank has made four deep cuts to its benchmark rate since the second half of 2019. "We expect Copom to reduce the Selic rate by 25bps today to a new record low level (4.25%), but potentially keep the door open for another cut in March," Dirk Willer, head of emerging market strategy at Citi Research, and Kenneth Lam, an emerging markets FX strategist, wrote in a note. MSCI's index for Latin American stocks climbed more than 1%, with Sao Paolo stocks leading gains. Brazil's second-largest private lender Banco Bradesco SA jumped 4% after it reported a 14% rise in fourth-quarter recurring net income from a year earlier but issued a more cautious outlook for 2020. In Argentina, its Buenos Aires province narrowly averted falling into default on Tuesday, saying it would make a $277 million payment on a 2021 bond after creditors would not grant a last-minute approval to delay it. The country's peso currency eased slightly on Wednesday. The Chilean peso firmed against the dollar as prices of copper, the country's main export, rebounded to their highest level in more than a week. Key Latin American stock indexes and currencies at 1458 GMT Stock indexes Latest Daily % change MSCI Emerging Markets 1092.71 0.67 MSCI LatAm 2861.64 1.17 Brazil Bovespa 117312.19 1.52 Mexico IPC 45464.21 0.93 Chile IPSA 4676.63 0.16 Argentina MerVal 41175.28 0.345 Colombia IGBC 1655.94 0.73 Currencies Latest Daily % change Brazil real 4.2496 0.19 Mexico peso 18.5949 0.34 Chile peso 775 0.81 Colombia peso 3349 0.33 Peru sol 3.3558 0.18 Argentina peso 60.5700 0.03 (interbank) (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Bernadette Baum)