Mexico peso, stocks battered by US financial woes
(Adds closing stock prices, debt price)
MEXICO CITY Feb 25 (Reuters) - The Mexican peso slipped on Wednesday and stocks fell amid uncertainty about how the new U.S. administration will be able to aid struggling banks and revive the economy, which consumes most of Mexico's exports.
The peso MXN= MEX01 weakened to 14.95 per dollar. Earlier in the day, it was down 0.35 percent at 14.89 per dollar at the central bank's 1:30 p.m. local time (1730 GMT) final reference.
The peso MXN= MEX01 weakened to 14.95 per dollar, but was off earlier lows down 0.35 percent at 14.89 per dollar at the central bank's 1:30 p.m. local time (1730 GMT) final reference.
The benchmark IPC stock index .MXX closed down 0.52 percent at 18,200.70 points.
Stock markets worldwide fell after an address before Congress by U.S. President Barack Obama on Tuesday night provided few clues as to how he would shore up battered banks or pull the economy out of recession.
"As long as there is no clarity about what will happen with the U.S. banking system, they won't be able to thaw credit channels and so the economic recovery will take longer," said Miguel Angel Flores, an analyst at government bank Bansefi.
Economists say Mexico's economy is slipping into recession due to the downturn in the United States, which buys around 80 percent of Mexican exports.
Mexico's peso has lost around a third of its value against the dollar since early August as the global financial crisis hit emerging markets.
This month the Mexican currency has been plumbing record lows as it hovers near the key psychological level of 15 per dollar.
Such jitters have spurred the central bank to launch its first direct interventions in the markets in more than a decade, defending the battered currency through direct dollar sales to brokers.
In debt trading, the government's benchmark 10-year peso bond MX10YT=RR edged up 0.066 of a point in price, pushing its yield down 1 basis point to 8.42 percent.
The yield on the 10-year peso bond has shot up more than 1 percentage point since late January.
Bonds have been partly undermined by bets that Mexico's central bank will not quickly cut interest rates to boost the flagging economy due to the weak currency, which is making imports more expensive and pressuring inflation.
In stock trading, shares in miner Penoles (PENOLES.MX) sank 8.57 percent to 143.37 pesos after the company reported a net loss during the fourth quarter. [nN24434393]
Shares in Cemex (CMXCPO.MX), the top U.S. cement supplier, gave up 3.92 percent to 9.07 pesos while its New York-traded stock (CX.N) dropped 5.1 percent to $5.96.
Bucking the broader markets decline, shares in chemical and plastic pipe maker Mexichem (MEXCHEM.MX) rose 1.66 percent to 10.41 pesos after reporting its fourth quarter results, which were in line with previous guidance. [nN25497457]
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