Mexico peso dips, stocks hit 15-month high on Cemex

MEXICO CITY, Sept 17 - Mexico's peso sank on Thursday as a mixed batch of economic data hinted at a tepid economic recovery in the United States, Mexico's top trading partner, while gains at Cemex drove stocks to a 15-month high.

The peso fell 0.72 percent to 13.2875 per U.S. dollar as other emerging market currencies also slipped.

The IPC stock index closed up 1.33 percent to 30,017.72, boosted by sharp gains in cement giant Cemex.

Better-than-expected headline numbers for data on U.S. housing, labor and regional factory activity offered more proof that an economic recovery was underway.

But investors focused on details in the reports that suggested the U.S. rebound could be sluggish, such as a drop in new groundbreaking for single-family homes and higher-than-expected continued jobless claims.

Wall Street slipped amid worries of a stronger pullback one day after U.S. stocks hit 2009 highs on optimism about a global recovery. Currency traders said investors were taking profits after strong gains among emerging market currencies.

"The market may keep going up the rest of the year. But it has risen so steeply, it makes you a little scared," said Ramon Cordova, a trader at Base Internacional brokerage in Monterrey.

Before Thursday's losses, the peso had gained around 3.6 percent since early September.

The peso surged nearly 1 percent on Wednesday after data showed U.S. industrial output rose for a second straight month in August, a good sign for Mexico's closely-linked manufacturers.

Analysts noted that Mexico's peso has lagged gains of other emerging market currencies amid uncertainty as lawmakers debate a key tax reform bill needed to reduce the government's dependence on oil revenue as crude production declines.

The government's benchmark 10-year peso bond bid up 1 basis point to yield 8.08 percent.

Mexico's central bank will likely keep interest rates steady on Friday, a Reuters poll showed, but analysts will be watching the bank's outlook on consumer prices as lawmakers debate potentially inflationary new taxes.

Mexican financial markets were closed on Wednesday for a national holiday. Traders said local stocks were catching up to sharp gains seen on Wall Street in the prior session.

Shares in giant cement company Cemex, a top U.S. supplier, surged 7.66 percent to 18.69 pesos on the U.S. housing starts data and speculation the United States could extend a first-time home-buyer credit.

Shares in telecommunications provider Axtel rose for a third straight session, adding 4.63 percent to 9.72 pesos, helped by news that it plans to offer satellite television.