* Mexican peso touches lowest level in 11 weeks
* Slide in oil prices hits Colombian peso
* Brazil, Argentina shut for carnival festival
(Updates prices, adds comments)
By Susan Mathew and Shreyashi Sanyal
Feb 24 (Reuters) - Latin American currencies and stocks were
caught in a global sell-off on Monday as investors steered clear
of risky bets after a jump in the number of coronavirus cases
outside China exacerbated global growth worries.
Fears of a pandemic rose after Italy, South Korea and Iran
reported a sharp rise in the number of new infections and
deaths, while other Middle Eastern countries also reported new
cases.
"The spread of the virus outside of China... combined with
continued heavy restrictions within China, challenges the
assumption that the outbreak will blow over with only limited
damage to the global economy," said Jonas Goltermann, senior
economist at Capital Economics.
With markets in Brazil and Argentina closed for local
holidays until Tuesday, MSCI's index of Latam currencies
fell 0.3%, while its stocks counterpart
slipped 1.2%, on course for its third straight
session of losses.
Mexico's peso slipped 0.8%, touching an 11-week low
early in the session, set for its a third straight session of
declines. Mexican stocks fell 2.5% to their lowest in almost two
months.
Mexican consumer price inflation came in slightly below
forecasts in the first half of February but remained above the
central bank's target rate, data showed on Monday.
Markets had reflected intermittent sparks of optimism over
the last two weeks on hopes that the coronavirus outbreak might
pass over by April, with falling numbers of new cases in China
lending weight to that assessment.
But fears have increased that the virus will continue to
spread, leading to more travel curbs and suspended activity at
factories and retail outlets, causing a broader hit to global
supply and demand.
"The market is still looking at the base-case of a V-Shape -
a steep slump and a sharp recovery. But the fact is that people
still don't have a handle on how bad this can get," said Win
Thin, head of emerging market currency strategy at Brown
Brothers Harriman.
A nearly 4% slide in oil prices knocked Colombia's peso
lower, putting it on track for its steepest one-day drop
since November.
The International Monetary Fund on Friday trimmed Colombia's
growth estimate for the year, saying the country needs a more
durable fiscal adjustment to meet its financial targets. It
added that the central bank should increase reserves to protect
against external shocks.
Chile's currency gave up 1% as prices of copper fell
on the London Metals Exchange.
Santiago-listed stocks slumped 2% to their lowest
in more than three months.
Key Latin American stock indexes and currencies at 1943 GMT:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 1055.40 -2.66
MSCI LatAm 2674.52 -1.2
Mexico IPC 43695.6 -2.47
5
Chile IPSA 4430.63 -2.25
Colombia COLCAP 1609.56 -1.34
Currencies Latest Daily %
change
Mexico peso 19.0587 -0.86
Chile peso 808.1 -0.72
Colombia peso 3433.5 -1.62
Peru sol 3.404 -0.56
(Reporting by Susan Mathew and Shreyashi Sanyal in Bengaluru;
Editing by Dan Grebler)
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