Mexican Stocks Hit New Record High, Shrugging Off US Trade Worries Pan Kwan Yuk - FT.com
go to original March 21, 2017

The country’s benchmark IPC index rose as much as 1.3 per cent to 49,240.09 in morning trade, capping a stunning rally that has seen the exchange completely erase its post-US election losses and rise above the previous intraday record of 48,956.06 set last August.

The fiesta in Mexican equities is being fueled by a number of factors. The collapse of the peso – which, despite its recent rally, is still down more than 4 per cent from its pre-election levels – is providing a boost to exporters and magnifying the income of companies that report in pesos but earn the bulk of their revenue overseas.

Another driver has been the continued strength in the US economy, which should benefit Mexican manufacturers, especially given the recent conciliatory comments from Washington about the future of the North American Free Trade Agreement.

A stabilization in oil prices since November and more dovish comments from the US Federal Reserve over the pace of future interest-rate rises is also helping to anchor sentiment. Oil income represents a third of Mexico’s national budget while a less aggressive Fed would ease pressure on the country’s own central bank to hike quickly.

Read the rest at FT.com

Related: Mexico Stops Sweating Over Fate of NAFTA (Automotive News)

Related: Strategists at Goldman Sachs Say the Mexican Peso Has More Room to Rise (MarketWatch)

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