Mexico's stocks rose on Friday and a global rebound on investor's relief that dismal US employment data wasn't as bad as pessimists had feared. The benchmark IPC stock index gained 1.28 percent to 19,902 points, following two days of heavy losses.
The peso firmed 2.43 percent at the central bank's final 1:30 pm local time (1930 GMT) reference to 12.76 per dollar, recovering from a two-day sell-off in emerging market currencies.
US employers slashed an unexpectedly steep 240,000 jobs in October but financial markets had braced for a much worse outcome in the days before the release of the data. Some investors found it encouraging that US President-elect Barack Obama plans to meet with top economic and business advisers later on Friday, underscoring the urgency he attaches to the economy's problems.
"Today the markets are much more focused on looking forward, most of all with the issue of a new president in the United States and the hopes that there could be a new economic program," said Luis Flores, an economist at Ixe brokerage in Mexico City. Some investors also moved to unwind bets made against the peso earlier in the week ahead of a dismal US employment report that was released on Friday, traders said.
A report on Friday showed that rising energy prices sent Mexican inflation to its highest in seven years in October keeping pressure on the central bank to hold interest rates steady despite signs of a sharp economic slowdown. Manuel Galvan, an analyst at MetAnalisis consultancy in Mexico City, said some investors were seeking the higher yields of peso-denominated assets as the United States is expected to further cut rates.
"The US jobs data suggests yields will go down in the United States, and that is pushing investors into any other money besides the dollar," Galvan said. Increasing signs of recession in the United States, Mexico's chief trading partner, hammered the currency and peso-denominated assets during October.
In debt trading, the yield on the government's benchmark 10-year peso bond fell 3 basis point to 8.94 percent. In equities trading, shares in America Movil, Latin America's biggest cell phone operator, gained 2.14 percent to 20.50 while its shares in New York jumped 4.71 percent to $32.
Offsetting gains, shares in Cemex, the world's No 3 cement maker, fell 5.38 percent to 8.80 pesos while its shares on Wall Street fell 3.09 percent to $6.90. Cemex said on Friday it would sell its Canary Island operations to Spanish investment firm Cimpor Inversiones for 162 million euros ($211 million) to pay down debt.
Comments
Comments are closed.