EMERGING MARKETS-Argentina's peso extends slide, stocks rebound on China relief

By Sruthi Shankar Aug 13 (Reuters) - Argentina's peso dropped again on Tuesday after a shocking defeat for business friendly President Mauricio Macri in Sunday's primary election raised fears of populist policies, although Latin American stock markets rebounded after the United States delayed tariffs on certain Chinese goods. The peso fell another 4% after a near 16% plunge on Monday. The currency had fallen 30% to record low of 61.995 per dollar in the previous session, sending shockwaves across global financial markets. Opposition candidate Alberto Fernandez, who has former President Cristina Fernandez as his running mate, pulled off a stunning upset in the primary with a wider-than-expected 15-point lead over incumbent president Macri. "The news ... raised the specter of the populist opposition seeking to renegotiate/default on the IMF loans coming to maturity," Jefferies analysts wrote in a note. "Yesterday's currency slump will only cause inflation to remain stubbornly high thereby keeping monetary policy tight and in turn causing further public disillusionment with the current administration." The cost of insuring against an Argentine sovereign default jumped again on Tuesday. Data provider IHS Markit showed five-year credit default swaps (CDS) marked at 2,116 basis points, up from what was already a five-year high the previous day. However, the Merval stock index rose more than 10% after closing down 31% on Monday. Equities and other risk assets across the globe took relief from news that the Trump administration will delay 10% tariffs on certain Chinese products, including laptops and cell phones, that had been scheduled to start next month. Investors have been edge as a recent escalation in the U.S.-China trade dispute, including the weakening of the yuan past the 7-per-dollar mark, raised fears of recession. The Brazilian real reversed early losses to trade up 0.7%. The currency had weakened past the 4-per-dollar level on Monday for the first time since late May. The Bovespa index rose more than 1%, mirroring gains on Wall Street. Latin America's largest independent investment bank, Banco BTG Pactual SA, jumped 5% after reporting a 50.2% increase in second-quarter recurring profit. Shares of Brazil's state-controlled power company Eletrobras , however, fell 0.7%, despite its second-quarter net income soaring 305% from a year ago. Latin American stock indexes and currencies at 1453 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 972.71 -0.18 MSCI LatAm 2711.39 2.17 Brazil Bovespa 103597.48 1.65 Mexico IPC 39842.99 -0.02 Chile IPSA 4865.26 0.78 Argentina MerVal 30744.21 11.67 Colombia IGBC 12634.72 1.48 Currencies Latest Daily % change Brazil real 3.9520 0.78 Mexico peso 19.4619 0.74 Chile peso 706.4 1.08 Colombia peso 3381.63 1.27 Peru sol 3.374 0.21 Argentina peso 55.5000 -3.60 (interbank) (Reporting by Sruthi Shankar in Bengaluru)