Mexican stocks fell sharply on Friday as investors locked in profits after three straight days of gains and amid fear on Wall Street of more trouble in the global financial sector. The benchmark IPC stock index dropped 1.88 percent in choppy trade to 27,379.92 pesos, with heavyweight Cemex dragging on the market.
In the debt market, the price of the benchmark 10-year government bond fell 0.313 of a point to bid 101.743, pushing its yield up 5 basis points to 7.70 percent. The peso weakened slightly, down 0.06 percent at 10.905 per dollar.
Shares had initially risen 1 percent as equities jumped across the world, but then dropped amid rumours on Wall Street that European banks might warn about their profits.
Investors are worried that a slowdown or a recession in the United States could hit the world economy. Mexico, which sends about 80 percent of its exports to the US, is particularly sensitive to economic downturns in the United States.
"People are still talking about the possibility that the world economy is going to take a punch in the kidneys," said Jorge Lagunas, an analyst at Interacciones brokerage in Mexico City.
While the IPC index had surged 10 percent in the previous three sessions, it still stands over 7 percent lower for the year. Cement maker Cemex, a top supplier of the US construction industry, slumped 6.10 percent to 26.65 pesos, giving back part of a 22 percent gain in the prior three sessions. Its New York traded shares were down 6.34 percent at $24.37. A Cemex official had no explanation for stock's losses. Dominant cell phone operator America Movil dropped 3.16 percent to 30.01 pesos, while its New York traded shares lost 3.37 percent to $55.09.