Mexican Stocks Soar on Election Results

Mexican stocks closed at a three-month high Tuesday and the peso continued to strengthen as optimism in the wake of Vicente Fox’s presidential victory persisted.

With U.S. markets closed for the Independence Day holiday, Mexico provided the fireworks in global markets.

The key IPC index closed up 146.67 points, or 2%, at 7,520.04, after soaring 6.1% on Monday when Fox’s victory was apparent.

Tuesday’s close was the IPC’s highest since April 7. The index now is up 5.5% since year’s end.

But some traders said they expect profit taking when U.S. investors return Wednesday.

In currency trading, the peso rose to 9.515 per dollar, up from 9.57 on Monday.

Among other Latin American markets, Brazil’s key index gained 1.1% and Argentina’s Merval index rose 1.3%.

In other stock markets worldwide, Spain’s key index rallied 1.6%, perhaps in sympathy with the Mexican market’s gains. Many Spanish industrial giants have stakes in Mexican businesses.

Most other European markets ended with modest gains or small losses.

European telecom stocks were active on news that the company that compiles the Stoxx series of European share indexes will recalculate the indexes in September, to the detriment of some European phone giants and the benefit of others.

France Telecom, Europe’s second-biggest phone company, fell 3.8% on Tuesday, while No. 1 Deutsche Telekom fell 4.3%.

Still, the French CAC-40 stock index eased just 0.2%. Germany’s DAX index lost 0.2% as well.

In Canada, the Toronto Stock Exchange-300 index hit a record high, though in the slowest trading of the year. Led by Nortel Networks, the TSE-300 rose 105.96 points, or 1%, to 10,301.41.

“Nortel is a company growing crazily. People want high-growth stories like Nortel and Bombardier,” said Louis Veilleux, an equity analyst at Pictet & Co. in Montreal.

In Tokyo, the benchmark 225-stock Nikkei index shed 144.51 points, or 0.8%, to 17,470.15.

The market reacted little to a Japanese central bank report showing further improved business confidence.

Despite the fall in the Nikkei, analysts said the general mood of the market was positive. “Overall market fundamentals remain steady,” said Hidenori Karaki, equity general manager at Tokyo Mitsubishi Personal Securities.

The dollar slipped marginally in Tokyo, to 106.32 yen, amid speculation that Japan’s central bank might lift interest rates before long.

Elsewhere in Asia, Hong Kong’s Hang Seng index rose 0.7% to 16,235.76.

South Korea’s main share index fell 2% to 818.53.