Mexico Stock Markets End Up 4.8 Percent

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The Associated Press
Monday, July 3, 2006; 5:57 PM

MEXICO CITY -- Markets rose broadly across Latin America on Monday, a day that saw Mexican stocks close up 4.8 percent as investors reacted to a thin lead in presidential election returns by the conservative candidate.

Mexico's currency and bonds also rallied sharply on news that Felipe Calderon was leading his leftist rival, Andres Manuel Lopez Obrador, by a seemingly insurmountable 380,000 votes with more than 37 million counted.

Electoral officials have cautioned that the results are preliminary and they will not declare a winner until the outcome of an official tally on Wednesday.

But traders were optimistic, sending Mexico's IPC index of 35 leading issues up 914 points to close at 20,060.

The peso closed stronger at 11.1055 to the dollar after opening at 11.174, up from Friday's 11.3475 close. The 2.2 percent appreciation carried the currency to its strongest level since May 16.

Local bonds were also in demand, with the yield on government debt maturing in 2014 plunging 31 basis points to 8.7 percent.

Meanwhile in Brazil, Sao Paulo's main index closed 2 percent higher at 37,357 points as investors took encouragement from an improving inflation outlook and hopes for monetary policy easing locally and abroad.

The real weakened after early gains, ending more than half a percentage point lower at 2.18 to the dollar after the central bank stepped into the market for the first time since May to buy dollars.

Chile's benchmark Ipsa index also closed higher, up 0.8 percent at 2,142. The Chilean peso ended stronger at 536.8 against the dollar, compared with 538.9 at Friday's close.

In Buenos Aires, Argentine stocks gained ground for a fourth straight session, with the benchmark Merval Index rising 0.85 percent to reach 1,726 points while the broader General Index ended 0.71 higher at 82,757. The peso ended unchanged from Friday's close at 3.085 to the dollar.


© 2006 The Associated Press

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