Mexico Stocks Close Higher On Fed, Peso Weakens; IPC +1.9%

 
   By Paul Kiernan 
   Of DOW JONES NEWSWIRES 
 

MEXICO CITY (Dow Jones)--Mexico's stocks closed higher for a second consecutive session Wednesday, maintaining strong gains despite a late sell-off in U.S. equities, while the peso weakened slightly versus the dollar.

The local IPC stock index of 35 leading issues closed up 1.9%, or 543.98 points, at 29430.51. Volume was light at 188.6 million shares traded at a total value of 5.17 billion pesos ($390.2 million).

The peso was quoted in Mexico City closing at MXN13.2915 to the dollar, compared with MXN13.2650 at Tuesday's close.

RBC Capital Markets, noting widespread gains in other emerging-market currencies, said in an afternoon comment that lingering concerns about a possible downgrade to Mexico's credit rating were behind the peso's lag Wednesday.

Boosting local equities was the Federal Reserve's monetary policy statement, in which the U.S. central bank said that the information it has received since September suggests "that economic activity has continued to pick up."

Still, the Fed kept its benchmark interest rate unchanged at a level between zero and 0.25% due to stubbornly high unemployment and low inflation.

Mexico stands to benefit more from a recovery in the U.S. economy than other major Latin American countries given the close economic ties between the two nations.

Wireless phone company and IPC heavyweight America Movil (AMX, AMX.MX) L shares closed 1.9% higher at MXN30.44, cement maker Cemex (CX. CEMEX.MX) CPO shares jumped 3.4% to MXN14.56, and retailer Wal-Mart de Mexico (WMMVY, WALMEX.MX) V shares rose 1.6% to MXN47.55.

Home builder Homex (HXM, HOMEX.MX) shares fell 2.9% to MXN73.43 after it said it will ask its shareholders on Nov. 19 to approve a capital increase of 5% to 6%.

Prices also fell in the secondary market for Mexican government debt, pushing bond yields higher. The yield on 10-year bonds due 2018 rose 4 basis points to 8.04%, and the yield on 20-year bonds due 2024 rose 4 basis points to 8.29%.

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

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(END) Dow Jones Newswires

November 04, 2009 17:34 ET (22:34 GMT)


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