(Adds closing stock prices, debt price)
MEXICO CITY Feb 25 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)
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
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
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]