EMERGING MARKETS-Latam stocks, FX set to lag emerging market peers in April

* Stocks and FX fall on the day amid further risk aversion * Mexican economy marks worst qtrly contraction since 2009 * Brazil's real to underperform regional peers * Chilean, Colombian pesos to gain for the month By Ambar Warrick April 30 (Reuters) - Latin American currencies dropped on Thursday, and were set to end the month lower as continued signs of economic damage from the coronavirus outbreak added to concerns over stability in regional economies. Brazil's real and Mexico's peso fell about 1.6% and 0.8%, respectively. Latin American currencies were also seen underperforming over the month in comparison to their emerging market peers. The MSCI's index of regional currencies was set to fall 2.5% in April, while a broader index of developing world currencies was set to add 0.6%. Latin American stock markets retreated for the day. Like currencies, they were set to underperform their broader emerging market peers in April. The MSCI's index of regional stocks eyed a 6.5% gain in April, while an index of broader developing world stocks was set to add 9.3%. A swathe of weak economic data from the developed world had bought with it fresh risk aversion, adding to existing concerns that many Latin American economies lacked the fiscal strength to combat the coronavirus. Data showed Mexico's economy was set to mark its sharpest quarterly contraction since 2009, although the preliminary figures were slightly better than expected. "Mexico stands to suffer the severest slow-down in Latin America and it looks as though Banxico is now ready to favour growth over currency stability," ING analysts wrote in a note. Brazil's real was set for its worst day in more than a week. The currency also underperformed its regional peers for the month, having recently sunk into record-low territory as political uncertainty in the country added to concerns over the economic shock of the virus. The unemployment rate in Latin America's largest economy rose to 12.2% in the three months to March, its biggest rise in three years, even as the full impact of the coronavirus was yet to be reflected. "President Jair Bolsonaro’s handling of the economy and cabinet departures have added a political risk premium to the BRL, which may remain embedded during 2Q20," ING analysts wrote. Brazilian stocks fell nearly 2%, dragged lower by a more than 5% drop in Banco Bradesco SA, one of the country's largest lenders. The bank's first-quarter profit missed expectations, while its provisions for expected loan losses soared. Mexican and Chilean stocks fell more than 1% each. On the other hand, the Chilean and the Colombian pesos were set to gain for the month. Regional markets will be closed on Friday for labor day. Key Latin American stock indexes and currencies at 1414 GMT Stock indexes Latest Daily % change MSCI Emerging Markets 927.10 0.81 MSCI LatAm 1678.31 -1.83 Brazil Bovespa 81638.38 -1.84 Mexico IPC 36456.04 -1.12 Chile IPSA 3972.18 -1.06 Argentina MerVal - - Colombia COLCAP 1145.66 -0.02 Currencies Latest Daily % change Brazil real 5.4368 -1.55 Mexico peso 23.9170 -0.75 Chile peso 839.3 -0.54 Colombia peso 3921.94 -0.07 Peru sol 3.3657 0.00 Argentina peso 66.8300 -0.12 (interbank) (Reporting by Ambar Warrick in Bengaluru Editing by Alistair Bell)