Mexican stocks slipped on Friday, dragged down by losses in shares of miners as global metals prices fell, while bonds fell for a third straight day after inflation hit a three-year high. The benchmark IPC stock index lost 0.25 percent to 30,674.36 points while the peso weakened slightly, down 0.04 percent to 10.5755 per dollar at the official central bank close.
In stock trading, miner Group Mexico, one of the world's biggest copper producers, lost 2.13 percent to 78.16 pesos as copper futures fell as inventories in London and Shanghai surged. Miner Penoles, whose subsidiary Fresnillo Ltd is the world's biggest producer of refined silver, lost 3.36 percent to 299.76 pesos.
Penoles floated Frenillio on the London exchange on Friday, raising 905 million pounds ($1.77 billion), as part of a strategy to separate its precious metals from its base metals units. Mexican airport operator GAP plunged 8.18 percent to 39.07 pesos, the biggest drop the stock has seen since it was listed in April 2006, after it reported on Thursday that its April passenger traffic fell 5.3 percent.
Losses in the IPC index were offset by gains at top retailer Wal-Mart de Mexico, which added 1.34 to 43.81 pesos. Shares of petrochemical producer Mexichem jumped 5.68 percent 78.36 pesos, its biggest single day gain in four months, after Citigroup raised its one-year target price for the stock to 127 pesos from 80 pesos on the possibility of a joint venture in its fluorine business.
The government's benchmark 10-year peso bond fell 0.462 of a point in price to bid 98.12, pushing its yield up 7 basis points to 8.03 percent, a four-month high. Consumer prices rose 4.55 percent in the 12 months through April, well above the level the central bank says it can tolerate, and reinforced expectations this week that borrowing costs will not be coming down anytime soon.
"This is making people nervous that the central bank could raise its reference rate," said Miguel Gaytan, a fixed-income analyst at consultancy Bursametrica Management. Mexico's central bank has held interest rates at 7.5 percent for six months since last hiking in October 2007.