(Recasts, adds closing stock prices)
MEXICO CITY, July 16 (Reuters) - Mexican stocks surged to a
10-month high on Thursday, boosted by hopes corporate earnings
would beat estimates.
The IPC index <.MXX> closed up 1.58 percent at 25,735.56,
its highest since Sept. 5, continuing a seven-session winning
streak that has pushed the index up more than 10 percent.
The peso slipped as data showing weak regional U.S. factory
activity boded poorly for Mexico's industrial base, which is
closely linked to the United States.
But the currency <MXN=><MEX01> pared most of its losses as
stocks gained, trading 0.07 percent weaker at 13.5575 per U.S.
dollar.
Mexican conglomerate Alfa posted surprisingly strong
results during the session, adding to a hopeful tone in U.S.
equity markets after JPMorgan's robust results stoked growing
optimism about the quarterly earnings season.
"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.
Alfa, which makes chemicals, auto parts and cold meats,
posted a profit in the second quarter, following a loss during
the first three months of the year. Its stock <ALFAA.MX> surged
7.32 percent to 42.94 pesos. [nN16429921]
Latin America's top wireless operator, America Movil
<AMXL.MX>, which is set to post results next week, added 2.92
percent to 27.86 pesos.
Cement maker Cemex <CMXCPO.MX> rose 3.3 percent to 11.88
pesos.
Unexpected weakness in the Philadelphia Federal Reserve's
index of Mid-Atlantic manufacturing activity 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 with 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.
In debt trading, the government's benchmark 10-year peso
bond <MX10YT=RR> was little changed, its yield dipping 1 basis
point to 8.13 percent.
Mexico's central bank is seen cutting its key interest rate
by a quarter percentage point to 4.50 percent on Friday, but it
is expected to signal its easing cycle is at an end, according
to a Reuters poll. [nN15221393]
(Reporting by Pedro Nicolaci da Costa and Michael O'Boyle;
Editing by Dan Grebler)
Keywords: MARKETS MEXICO/
