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Mexico Stocks Open Lower On Soft US Equities; Peso Weaker

By Paul Kiernan

Of DOW JONES NEWSWIRES

MEXICO CITY (Dow Jones)--Mexico's stocks opened moderately lower and the peso weakened Tuesday as U.S. equities fell on profit-taking from the previous session and local heavyweight shares were mixed.

The peso was recently quoted at MXN13.0570 to the dollar compared with MXN13.13 in early trading and MXN12.89 at Monday's close as the U.S. dollar continued gaining against global currencies, while prices plummeted in the secondary market for government debt.

The market's IPC index of 36 most-traded issues was recently down 0.4% at 20,696.32 points. Volume was 48.1 million shares worth a total value of 950.4 million pesos ($73.1 million).

The Dow Jones Industrial Average, which the IPC often tracks, was down 0.4% as some investors took profits following a major rally in U.S. equities.

Wireless company and market heavyweight America Movil (AMX) L shares were down 0.7% at MXN22.83, retailer Wal-Mart de Mexico (WMMVY), or Walmex, V shares were off 0.5% at MXN31.35, phone company Telmex (TMX) L shares were down 0.7% at MXN14.25, and copper miner Grupo Mexico (GMEXICO.MX) B shares were flat at MXN8.35.

Meanwhile, cement maker Cemex (CX) CPO shares were up 0.6% at MXN10.20, and banking group Banorte (GFNORTE.MX) O shares were flat at MXN22.00.

In the secondary market for local government debt, the yield on 10-year bonds due 2017 jumped 21 basis points to 9.71% and the yield on 20-year bonds due 2024 surged 29 basis points to 9.94%.

Gerardo Copca, director of analysis at the local Metanalisis research firm, noted in a report that the IPC appears to be consolidating above 20,000 points.

The index rose 2.3% in the previous sessions on a rally in the U.S.

With the possibility of an oil reform law being passed in Mexico's Congress, along with a number of companies scheduled to report their third-quarter earnings, Copca said "this could be a good week for the market."

"But don't expect too much, either," he said, adding that corporate liquidity levels in Mexico remain stagnant and don't justify an increase in equity positions.

-By Paul Kiernan, Dow Jones Newswires; (5255)5001-5726, paul.kiernan@dowjones.com

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(END) Dow Jones Newswires

October 21, 2008 10:49 ET (14:49 GMT)


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