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EMERGING MARKETS-Latam stocks, FX set to mark third week in red as virus cases surge

Shreyashi Sanyal and Susan Mathew

(Updates prices) By Shreyashi Sanyal and Susan Mathew June 26 (Reuters) - Latin American currencies and stocks eyed their third straight week of declines as rising coronavirus cases in the region and globally put a question mark over the pace of recovery from the pandemic-fueled slump. The MSCI's index for Latin American stocks tumbled 3.6% for its worst session in two months, while its currencies counterpart fell 1.8%. Over the week, they were down about 4% and 1.5%, respectively. Cases in South America continued to accelerate, with Mexico's health ministry reporting 6,104 new confirmed cases and 736 deaths on Thursday, while the country's Finance Minister Arturo Herrera tested positive for the virus. Brazil remained the second largest COVID-19 hot spot in the world, topped only by the United States, which reported a record daily rise in cases on Thursday. Some month and quarter-end adjustments could also be playing into markets, analysts said. The Brazilian real led declines among regional counterparts, weakening 2.6% against a steady dollar, while the country's main stock index looked to post its biggest drop since late April. In Latin America's biggest economy, the Federal University of Sao Paulo is in talks to test a potential coronavirus vaccine developed by Italian researchers. Mexico's peso slipped 1.4% after data showed Mexico's economy posted a record contraction in April, highlighting the devastation caused by lockdowns on economic activity, particularly in manufacturing. The Chilean peso also fell 1%, as the world's biggest copper miner Codelco said it was suspending refinery and foundry operations at its sprawling Chuquicamata division to prevent further spread of the coronavirus. An unabated rise in cases and gloomy economic forecasts have stalled a sharp recovery for Latin American stocks from a meltdown in March, with investors doubtful if current stimulus measures will suffice. Meanwhile, International Monetary Fund Managing Director Kristalina Georgieva said the global economic crisis due to the coronavirus could ultimately test the fund's $1 trillion in total resources, "but we're not there yet." Next week, investors will be watching for a rate decision from Colombia's central bank, and manufacturing PMIs for June for Mexico and Brazil. A Reuters polls showed Argentina's economic activity, due on Monday, likely plunged 21% in April. Key Latin American stock indexes and currencies at 1924 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 998.81 -0.56 MSCI LatAm 1856.84 -3.55 Brazil Bovespa 93611.28 -2.47 Mexico IPC 37499.85 -0.62 Chile IPSA 4012.17 -0.65 Argentina MerVal 40590.31 -3.349 Colombia COLCAP 1118.02 -0.62 Currencies Latest Daily % change Brazil real 5.4627 -2.49 Mexico peso 22.9910 -1.50 Chile peso 819.4 -0.95 Colombia peso 3747 -0.44 Peru sol 3.5277 -0.71 Argentina peso 70.2100 -0.07 (interbank) (Reporting by Shreyashi Sanyal in Bengaluru; editing by Jonathan Oatis and Tom Brown)