(Recasts, adds analyst comment, background)
MEXICO CITY, July 16 (Reuters) - The Mexican peso fell on
Thursday as a pullback in regional U.S. factory activity dimmed
the prospect of an industrial rebound in Mexico, while Mexican
stocks rose on hopes corporate earnings would beat estimates.
The currency's decline came a day after the biggest rally
in more than a month. Dealers pushed the currency <MXN=><MEX01>
0.34 percent lower to 13.594 pesos per dollar.
Mexican stocks, which had surged more than 4 percent on
Wednesday, extended gains. The IPC index <.MXX> climbed 1.33
percent to 25,672.
"Corporate reports in Mexico and the United States are
beating expectations and the outlook seems a bit less dark than
before," said Sandra Tinoco, an analyst at Monex brokerage in
Mexico City.
Mexican conglomerate Alfa posted a 22 percent decline in
second-quarter earnings, but investors were focusing on its
improved operating efficiency, and pushed the stock <ALFAA.MX>
up 6.17 percent to 42.48.
Latin America's top wireless operator, America Movil
<AMXL.MX>, which is set to post results next week, added 1.85
percent to 27.59 pesos.
Nudging the currency lower, the Philadelphia Fed's index of
Mid-Atlantic manufacturing activity fell more than expected to
minus 7.5 in June. That countered some of the optimism that
followed an improved reading in a measure of business activity
in New York State.
Such softness raised concerns about Mexico's own
manufacturing activity, which has plummeted since the start of
the year. Data on Friday is projected to show a 12.5 percent
drop in output for May compared to a year earlier.
Some 80 percent of Mexico's exports are sent to the United
States. The U.S. recession has had a ravaging effect on
Mexico's economy, with gross domestic product set to contract
more than 6 percent this year -- possibly its worst decline
since the Great Depression.
(Reporting by Pedro Nicolaci da Costa and Michael O'Boyle;
Editing by Diane Craft)
Keywords: MARKETS MEXICO/
