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Mexican share

prices resume

winning ways

MEXICO CITY: Mexican stocks bounced back from a brief brief early bout of profit taking and peso worries on Wednesday to end sharply higher on lower interest rates.

The 37-share IPC index rose 35.01 points, or 1.09 percent, to 3,252.87. Volume was strong again at 162.59 million shares.

"The market respected its support at 3,200 points, and that is what really turned things around today," said Francisco Blanco, director of analysis at Arka Brokerage firm.

Stocks sagged to support levels at the open on worries the peso would fall after a sharp decline in interest rates. But the peso lost little ground early and spurred equity buying.

The peso ended stronger despite a 269-basis-point drop in rates on the bellwether 28-day Cetes to 31.86 percent at the central bank's weekly auction on Tuesday.

A stronger peso has allowed rates to fall farther and faster than at any time since the peso devaluation, analysts said. "As long as the peso holds in there, things look good for the stock market," said Robert Pelosky, director of Latin American equity strategy at Morgan Stanley.

Mexican stocks also gained despite heavy losses on the Dow Jones, which some analysts said suggested the Mexican market was showing stronger signs of decoupling from Wall Street.

Stocks had fallen on Monday and Tuesday on profit-taking from recent gains.

There were 54 winners and 30 losers on the broad market.

Another bright spot for the market on Wednesday were first quarter earnings from cement firm Apasco and retailer Soriana, which dealers said were positive.

Soriana B shares gained 2.80 percent following its reported first quarter profits of 128 million pesos.

Retailer Salinas Rocha LCP shares rose 11.11. percent to 38 centavos -- its second strong gain in two days. Dealers said investors are hunting for cheaply-priced stocks.-Reuter