Mexico Bolsa Has Biggest Weekly Drop Since March: Latin Stocks

Mexican shares has their steepest weekly slide in eight months on concern a slowing U.S. economy will crimp demand for Mexico's exports and drag down profits.

The Bolsa index fell 130.86, or 0.5 percent to 29,158.86. The weekly decline of 5.4 percent was the most since the week ending March 2 and was led by copper miner Grupo Mexico SAB. The Bovespa Index of the most-traded stocks on Brazil's Sao Paulo exchange rose 758.65, or 1.2 percent, to 64,320.56, a weekly gain of 0.4 percent.

``We've been lagging in a big way because of the connection to the U.S. economy,'' said Mauricio Brocado, head of equity research at Actinver SA in Mexico City. ``When they catch a cold, we get pneumonia.''

Mexico sells 80 percent of its exports to the U.S., where Fannie Mae, the biggest source of money for home loans, said today its third-quarter loss doubled as the housing slump deepened. U.S. consumer confidence fell in November to the lowest in two years on rising oil prices and falling home values, the Reuters/University of Michigan index showed.

The Mexican economy is also being slowed by rising domestic interest rates and concern that flooding last week in Tabasco state may add to inflation, Brocado said.

``Mexico's market is not one of the favorites among international investors right now,'' he said.

Grupo Mexico, Mexico's largest copper miner, had its biggest weekly decline since September, 2001, falling 16 percent as prices of the metal slumped. Wal-Mart de Mexico SAB, the country's largest retailer, fell 7.9 percent for the week on concern Mexican economic growth will slow and a report yesterday that October sales at stores open more than year declined 1.2 percent.
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