 |
|
|
 Business News | May 2006 
Mexican Stocks, Peso Plunge on Rate Concerns
 Reuters
| | This vignette from a 1916 stock certificate of the Compañía Petrolera "El Esfuerzo Nacional" S.A. of Mexico shows a stylized coastal oil field. |
Mexico City - Mexican stocks slumped 4.03 percent on Monday and the peso lost ground as a rout in commodities prices and fears about rising U.S. interest rates shook the confidence of emerging markets investors.
The IPC benchmark stock index retreated 812.85 points to close at 19,369.29 points. It was its steepest one-day drop since Sept. 19, 2002.
The peso weakened 0.77 percent to 11.27 per dollar, its lowest closing in around 14 months.
Stock markets around the world have fallen sharply in recent weeks, spooked by concerns that U.S. interest rate hikes could go further than previously expected and by a sell-off in record-high commodities.
Latin American equities have slid from recent record highs. Brazil's Bovespa has dropped over 12 percent since May 10 and Mexico's IPC index has lost about 11 percent. Both countries currencies have also been hit hard.
"The critical question going forward for everyone is to what degree is this a correction or to what degree is this a change in tendency," said Felix Boni, head of analysis at Scotiabank's brokerage in Mexico City.
"I would also say the fact we didn't have that much of a rebound on Friday in the Dow and here in Mexico would suggest ... there is something more serious going on," Boni said.
Recent falling prices for copper, gold, oil and other commodities hurt Mexican mining stocks.
Grupo Mexico, one of the world's largest copper miners, dropped 4.07 percent to 31.80 pesos.
Cellphone operator America Movil, the most heavily weighted stock in the IPC index, plunged 6.10 percent to 19.10 pesos and its New York-traded shares weakened 6.15 percent to $34.01.
Yields on Mexico's long-term bonds rose to their highest since early April.
The yield on Mexico's peso bond maturing in 2015 rose 14 basis points to 8.83 percent and the peso bond maturing in 2024 saw its yield rise 7 basis points to 9.04 percent.
"There's a perception that emerging markets, above all Brazil and Turkey, are overvalued, and that's ... hitting us," said one bond trader in Mexico City.
(Additional reporting by Vanessa Padilla and Cyntia Barrera)
Mexico Searches for New G3 Member
UPI
Mexico City - Mexican officials said Monday they would seek another nation to replace Venezuela in its three-nation trade pact including Colombia.
Venezuelan President Hugo Chavez said Sunday that he was opting to pull Venezuela from the G3 trade pact to focus his country's efforts at bolstering trade ties with the South American trade group Mercosur.
The Mercosur trade bloc is comprised of Argentina, Brazil, Paraguay and Uruguay.
Among those countries considered for replacing Venezuela are Ecuador, Panama and Peru.
Last month Chavez pulled Venezuela out of the Andean Trade Bloc because two members - Colombia and Peru - had signed free-trade agreements with the United States. |
| |
|
Vallarta Weddings
Tell a Friend
Site Map
Print this Page
Email Us