Mexican stocks hit by profit-taking

14 Nov, 2004

Mexico's stock market ended lower on Friday, weighed down by cellphone company America Movil as investors took profits following an earlier record high. The IPC benchmark stock index finished down 0.12 percent at 11,957.32 points after earlier hitting an all-time high of 12,044 points, above the psychologically important 12,000 mark for the first time. Mexican stocks have rallied about 22 percent since mid-August, in large part on expectations of economic growth and strong corporate profits.
"I would say this is simple profit-taking, since the market has risen so strongly," said Jose Gomez, an analyst at Value brokerage in Mexico City.
The peso firmed 0.52 percent to 11.3665 per dollar, helped by a rise in short-term interest rates that makes peso-denominated debt more attractive to investors.
Mexico's central bank left monetary policy unchanged on Friday despite inflation that keeps rising further beyond its target range, due largely to high energy prices.
Most analysts had expected the central bank to stand pat because Mexican interest rates have risen following a US rate hike on Wednesday.
Tighter monetary policy tends to push interest rates higher, slow economic growth and crimp stock prices.
In stock trading, America Movil slipped 0.59 percent to 25.36 pesos and its New York-traded shares finished flat at $44.69.
Banorte, the only bank to remain under the control of Mexican investors after a wave of foreign acquisitions in recent years, gave back 1.68 percent to 57.22 pesos.
The company's stock had risen strongly over the prior two days.

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