Mexico Is Haven for Latin America
HSBC Holdings' takeover this week of Mexico's fifth-largest bank offered the latest evidence that South America's financial crisis hasn't soured global perceptions of Mexico, or enthusiasm for investment in that market.</br></br>But some analysts are raising concerns that the stock market faces near-term pressure from the Mexican economy's reliance on the sluggish economy in the U.S., where Mexico sends more than 90% of its exports.</br></br>"The worry for Mexico is U.S. contagion," says Christian Stracke, an emerging-markets analyst for the research group CreditSights.</br></br>Indeed, the Mexican government yesterday reported that retail sales fell 0.4% in June from a year earlier, frustrating forecasts that the figure would rise a healthy 2.8%. The news, which dulled some of the optimism from last week's positive gross domestic product numbers for the second quarter, weighed on the stock market. Mexico's IPC Index ended down 0.5% yesterday at 6239.49, despite a rally on Wall Street.</br></br>Asian markets, meanwhile, closed mostly higher, and European stocks bounced back strongly. Overall, the Dow Jones World Stock Index increased 1.03%, or 1.56 points, to 153.14. Excluding the U.S., the index advanced 0.62%, or 0.7 point, to 113.44.