Mexican stocks dropped on Friday, pulled down by recently strong telecom firms and blue chip retailer Wal-Mart de Mexico. The IPC benchmark stock index lost 1.03 percent to finish at 17,737.59 points and the peso was marginally weaker at 10.7410 per dollar.
Wal-Mart de Mexico, by far Mexico's highest-sales retailer and recently at record highs, lost 3.19 percent to 59.17 pesos. America Movil, Latin America's leading cellphone operator, gave back 0.99 percent to 16.03 pesos per share. Its New York-traded shares were 0.47 percent lower at $29.96.
Telmex, which dominates Mexico's fixed line market but has been overtaken by increased mobile phone use, lost 0.38 percent to 12.94 pesos after hitting a record high of 13.10 pesos his week. "The market is taking a bit of a breather. It has to rest a little," said Rogelio Gallegos, a portfolio manager at Mexico City-based mutual fund company Actinver.
Mexico's IPC index has risen 37 percent this year and the peso has also rallied as foreign investors, tired of lacklustre returns from US markets, pour money into Latin America.
"As long as global emerging markets continue to be perceived as attractive, we believe there are good chances of maintaining market gains," Gallegos said.
Bucking Friday's downward trend, infrastructure construction company IDEAL, controlled by billionaire Carlos Slim, surged 12.86 percent to 9.48 pesos to a record high following news that it won a contract to build a 223-kilometer (138-mile) highway on the outskirts of Mexico City.
Miner Grupo Mexico, also near record highs, ended 0.77 percent higher at 24.83 pesos.
Morgan Stanley raised its 12- to 18-month price target for Grupo Mexico on Friday to $3.10 (33.36 pesos) from $2.33 because of higher expected copper prices.
"We have raised our copper price forecast to $1.75 from $1.40 in 2006 and to $1.50 from $1.15 in 2007 as inventories remain critically low and supply deficits continue," said Morgan Stanley analyst Andres Perez in a report.
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