2012.06.22 22:29:11 Mexican Stocks Rise with U.S. Equities, Homebuilders Outperform

--IPC stock index rises 1.4%, erases prior session loss

--Gains inspired by U.S. equity recovery after Thursday pounding

--Homebuilders surge on Infonavit incentive program


By Amy Guthrie


MEXICO CITY--Mexican stocks rose sharply Friday, recovering from the
previous session's battering as U.S. equities shrugged off a
much-anticipated round of bank downgrades by Moody's Investors Service
and Mexican homebuilders extended their rally on expectations of
additional government assistance.

The IPC index of Mexico's most-traded shares rose 556 points, or 1.4%,
to 39072 points on volume of 194 million shares traded worth 4.99
billion pesos ($361 million.) The IPC tumbled 1.2% Thursday after a
series of discouraging U.S. economic data. The index gained 3.5% on
the week.

Moody's Investors Service lowered the credit ratings of more than a
dozen large banks world-wide, citing significant exposure to the
volatility and risk of large losses from capital markets activities.
Investors had been bracing for downgrades since Moody's said in
February that it was reviewing more than 100 global banks.

In Mexico, the consumer price index rose well above expectations in
early June--by 0.24%--breaking through the Bank of Mexico's target
ceiling for the first time since early this year and further fading
the possibility of any interest rate cuts in the near future.

Unemployment meanwhile among Mexico's 50 million-strong workforce was
4.8% last month, compared with 5.2% in May of 2011. In seasonally
adjusted terms, unemployment was practically unchanged from April of
this year at just below 5%.

Shares of home-building firms continued to soar Friday on expected
incentives from Mexican government mortgage lender Infonavit that are
seen lining builders' pockets with additional working capital earlier
in the construction process. The incentives are likely to take effect
in July.

Builder Corporacion Geo surged 5.8% to MXN14.71 while Desarrolladora
Homex charged 7.4% higher to MXN34.02 and Urbi Desarrollos Urbanos
gained 5.4% to MXN13.06. All three shares rose more than 17% this
week, after word of the incentive program filtered into the market
Tuesday. Infonavit is expected to formally announce the program after
Mexico's July 1 presidential election.

Among other Mexican blue chips, market benchmark and wireless carrier
America Movil ended flat at MXN17.45, cement maker Cemex gained 2.5%
to MXN7.92 and retailer Walmex advanced 2% to MXN35.27, retracing some
of its 5.1% slide in the previous session.

Walmex after the close Wednesday said it's reducing its expansion
plans amid heightened scrutiny due to accusations that it bribed
public officials to speed store permits. The retailer now sees its
Mexican floor space growing 8% on the year in 2012 and through the
first quarter of 2013, compared with a 12% growth target previously
for the 2012 calendar year.


Write to Amy Guthrie at amy.guthrie@dowjones.com


(END) Dow Jones Newswires

June 22, 2012 16:29 ET (20:29 GMT)