Latam assets muted, to end week lower on virus worries

Most stocks and currencies in Latin America were set to end the week with declines on Friday, on concerns over a record rise in coronavirus infections in the United States.

MSCI's index for Latin American stocks fell 0.3%, while its currencies counterpart shed 0.4%. Both indexes tracked weekly falls, with investors showing more exposure to safe-haven assets, including gold and the Japanese yen.

More than 60,500 new coronavirus infections reported across the United States on Thursday, a single-day record rise, weighed further on markets' mood.

Rising coronavirus cases sparked worries of tighter containment measures, which could delay the ongoing economic recovery. Latam markets have rebounded sharply from a meltdown in March, but surging cases, political issues, concerns over sovereign debt and deteriorating economic fundamentals have weighed.

The Mexican peso was flat against the dollar, with data showing a 1.8% decline in industrial output in May from April and down 30.7% year-over-year.

"May's release suggests that Mexico's economy has probably suffered one of the largest peak-to-trough falls in output in the emerging world," said Nikhil Sanghani, assistant economist at Capital Economics.

"What's more, its (Mexico) recovery has been delayed and is likely to be weaker than in other emerging markets where the virus is under control."

In Brazil, inflation as measured by the IPCA consumer price index rose 0.26% in June over May, picking up after the deflation reported in the previous month. The real was largely flat, while Sao Paulo stocks eked out gains.

State-owned oil company Petrobras rose 0.5% after it said Abu Dhabi's investment fund, Mubadala Investment Co, will enter into exclusive talks to purchase Brazil's second-largest refinery.

Chile's peso fell as prices of its main export, copper, slipped on worries over a sharp rise in virus infections that shadowed optimism over resurgent demand in top consumer China.

In Venezuela, the congress on Thursday said it hired two US firms to manage $80 million seized from President Nicolas Maduro's government after Washington disavowed it and recognized opposition leader Juan Guaido as the country's legitimate president.