Mexican stocks closed lower on Friday after disappointing quarterly results by telephone company Telmex and cement maker Cemex. The benchmark IPC stock index shed 0.71 percent to 31,922.22 points. "Company results have not been good at all," said a stock trader in Mexico City.
Shares in Cemex, the world's top building materials company by revenue, slipped 2.31 percent to 37.69 pesos after reporting second-quarter earnings of $611 million, below average analysts' expectations of $623 million. Its New York-traded shares were off 2.92 percent at $34.88.
Shares in Telmex dropped 2.54 percent to 19.57 pesos after the company, the biggest fixed-line telephone operator in Mexico, posted higher-than-expected earnings but slow sales growth and a decline in the number of lines in use. Its New York-traded stock fell 2.98 percent to $36.17.
Broadcaster Televisa also dragged heavily on the index, slipping 3.04 percent to 59.71 pesos, as investors expected it to also post poor earnings. A Reuters poll showed investors expect a 21 percent drop in profits for the period. Its New York traded shares slumped 3.55 percent to $27.71.
Companies listed on Mexico's stock exchange have until July 27 to report earnings for the second quarter. Traders said the market was also hit by ongoing worries that trouble in the US subprime mortgage sector - which caters to borrowers with shaky credit histories - could spread throughout the US economy, Mexico's main trading partner.
"That has markets nervous," said a trader in Mexico City. Dominant cell Phone Company America Movil slid 1.3 percent to 34.26 pesos, while its New York traded shares were down 1.96 percent to $63.37. In the debt market, the price of benchmark 10 year government peso bond was flat at 102.153, leaving its yield steady at 7.65 percent.
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