Mexican stocks ended down 0.71 percent on Friday, failing to hold on to earlier gains as investors worried about the world economy and dumped blue chips. The IPC stock index initially gained at much as 2.38 percent on the back of telecom and mining stocks but lost steam towards the closing bell to finish down 145.10 points at 20,312.83, its third straight session of losses.
"We were a bit surprised with the earlier recovery, helped by a bounce in the US markets," said Carlos Ponce, head of strategy at Ixe financial group. "It caught our attention since there was negative US data in the morning," Ponce added, referring to a US government report that showed that permits for new homes sank to a nearly 27-year low.
However, the peso closed 2.2 percent stronger at 12.7790 per dollar after Mexico's central bank left its key lending rate steady at 8.25 percent during its monthly review on Friday. Mexican markets have been hit badly in recent sessions and the peso plunged to its weakest in over a decade last week as the financial crisis battered investor confidence.
Mexico's central bank warned that downward risks to the economy had increased, although its inflation outlook remained on track. In stock trading, miner Group Mexico reversed gains and ended off 0.26 percent at 7.68 pesos while cell phone giant America Movil pared gains to finish 3.65 percent higher at 22.16 pesos.
Brewer Modelo jumped 3.99 percent to close at 40.92 pesos. The maker of the popular Corona beer denied on Friday a report that it is seeking to buy back all or part of the 50 percent stake that its US partner Anheuser-Busch Cos Inc holds in the Mexican brewer. In the debt market, Mexico's 10-year bond eased 6 basis points to trade at 9.18 percent.
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