Bargain Hunters Rescue Bolsa
Mexican stocks rebounded at the end of Wednesday’s chaotic session after disenchantment over the government’s economic rescue program pushed prices so low that investors jumped in to hunt for bargains.
The Bolsa index closed 8.6 points lower at 2,269.87. Trading carried on well after the official close at 3 p.m. local time.
Earlier in the day, the Bolsa plunged more than 130 points after a jump in interest rates compounded fears about President Ernesto Zedillo’s plan to rescue the economy.
“The market’s volatility was provoked by heightened speculation and expectations on company results,” an analyst said.
Overshadowing the day was a sharp rise in Mexico’s bellwether 28-day Cetes rates to 33%. The higher credit costs are expected to crimp company profits this year.
The peso slid 4.7% against the dollar, reflecting the lack of confidence among many currency investors in Zedillo’s plan. In Mexico City, the dollar rose to 5.575 pesos from 5.325 on Tuesday.
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