Mexico Rallies Second Day

123jump.com Staff
04 Jul, 2006
New York City

Markets around the world traded higher but on a lighter volume in the abscence of U.S. investors. Asian markets closed higher but European market closed near flat line. Mexican Bolsa gained for the second day in a row as investors fears of street protests appear to subside. The too-close to call election may have many twists in the coming days. Both parties are likely to challenge the Presidential election results in the coming days.

[R]6:00PM Mexico market rallies for the second day.[/R]

- Gold in London and South Africa closed at $622.02 per ounce.
-Crude oil in Europe closed $73.89 per barrel.

-Asian markets staged a broad advance, led by 2.8% rise in Philippines and 1.5% in Thailand.
-European markets closed near flat line with a mild upward bias. Germany, Spain and Norway gained 0.3%.
-Latin American markets closed higher led by 1.34% rise in Mexico.

Markets around the world advanced but at a slower pace. In the absence of trading in the U.S. on account of July 4th Independence Day holiday, trading volume in Asia was down 40%, in Europe was down 30% and in South America was down 20%.

Mexico advanced 1.34% or 268.69 points to close at 20,329.49. The IPC index has gained 4.8% so far in the second half of the year and has advanced 14.9% year-to-date. Despite the strong rally, several challenges lie ahead for the market in the coming days.

With 98.5% votes counted in the Mexican Presidential election, Felipe Caldron, of the ruling National Party or PAN had 36.4% votes and opposition candidate Lopez Obrador had 35.34%.

A challenge by either candidate can draw out final selection of the candidate and formation of government, putting the young democracy and financial markets on the edge. Mr. Obrador said to reporters on Monday night that there are three million votes that are missing from ballots and Federal Election Institute must investigate.

The campaign manager for Mr. Obrador said that the party will request a vote-by-vote count in many polling booths. There are 300 election districts with app. 130,000 polling stations. The two-day stock market rally with a gain of 4.8% can quickly turn into sustained losses if the outcome of election is not decided in the next few weeks. At least for the last two days, investors have put asides fears of drawn out election results.

Stock market’s main index IPO closed with a gain of 1.34% but rose as high as 2.2% during the session. American Movil ((AMV)) gained 0.5% and Wal-Mart de Mexico fell 1.3%.