LATIN AMERICAN MARKETS: Mexico Index Down For Third Day, Ahead Of
GDP Data
By Carla Mozee
Mexican stocks lost ground Friday, ahead of the arrival of the country's
report on how its economy fared during the third quarter, and as investors
continue to take gains off the table in the wake of recent highs.
The benchmark IPC stock index slipped 0.4% to 30,698, with decliners paced by
home builders, retailers and manufacturing issues.
Shares of Homex Development Corp. (HXM) posted the sharpest decline, down 2.6%
. The home builder's shareholders on Thursday approved the company's plan to
increase capital in a moved aimed at financing its growth plans. The increase is
equivalent to 5% to 6% of Homex's current capital.
In exchange-traded funds, the iShares MSCI Mexico Investable index (EWW) fell
0.6%.
For the week, the index tracking Latin America's second-largest equity market
is set to decline about 1%. A loss on Friday would mark its third straight
decline after closing at its strongest level this year earlier in the week.
"The absence of catalysts favors profit-taking following highs," in markets
worldwide, wrote BBVA Bancomer analyst Juan José García
Petit in a note to clients.
Mixed economic data from the U.S., "which do not favor the further pricing in
of expectations, have contributed to broad-based profit-taking," as seen during
the previous session when the S&P 500 Index (SPX) dropped 1.3%.
"This consolidation of expectations and some renewed appetite for liquidity
also favors profit-taking in positions which have accumulated gains, such as
emerging markets, and more specifically Latam," said García Petit,
particularly as investors have been pricing in the growing probability of
intervention by regional central banks.
Brazil this week introduced a new tax on ADRs in a bid to stem the
appreciation of its currency and Chilean officials have expressed their concerns
about the surge in their currency.
In Mexico City, the government is due to report on third-quarter gross
domestic product, with the market looking for a year-over-year decline of 6.7%.
In the second quarter, GDP dropped 10.3% on a year-over-year basis. Mexico has
been battling its worst recession since its currency crisis in 1994.
The Organization of Economic Cooperation and Development on Thursday projected
that Mexico's recession will bottom out in the third quarter of this year, and
saying growth is likely to return gradually in 2010. The decline in economic
activity has slowed "supported by the rebound in oil prices and increasing
exports to the United States," and as monetary and fiscal stimulus measures take
hold," the group wrote.
Mexico is the only Latin American member of the OECD.
Argentina's Merval index was down 0.9% but Chile's IPSA rose 0.5%.
Trading in Brazil was closed for a holiday.
(END) Dow Jones Newswires
11-20-091514ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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