Global Markets and Economic Update
MEXICAN STOCKS
* The Bolsa crashed again Wednesday, falling 107.44 points, or 5.2%, to 1,957.33--its lowest close since Nov. 8. The catalyst was a surge in short-term interest rates, as Mexico’s central bank allowed rates to rise to 18% to defend the peso.
* The market has been reeling for months from the slowing economy and from the political aftermath of presidential candidate Luis Donaldo Colosio’s assassination. Now, with U.S. interest rates continuing to rise, Mexico has little choice but to boost domestic rates to keep capital from fleeing. But in the near term, that may further depress stock prices, despite their already low price-to-earnings ratios, analysts say.
Source: D.A. Campbell; Times wire services
SPOTLIGHT: THE NETHERLANDS
The recession in Western Europe has slowed the growth of the Dutch economy, which is dependent on trade. Recently, the government has been working to get more foreign investment from outside of Europe. The nation has traditionally been a gateway to European markets for overseas goods.
Sources: Bank of America; World Information Services
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