‘Nervousness’ Drives Down Peso, Bolsa Again : Trade: Tourism and steel conglomerate Grupo Sidek defaults on $19.5 million in corporate debt.

Key interest rates soared and the Mexican peso and stock market plummeted to near-record lows Wednesday on continued doubts about the economy as Mexican Central Bank officials pushed to finalize President Clinton’s $20-billion bailout plan.

Conceding continued “nervousness” in the nation’s financial markets, Treasury Secretary Guillermo Ortiz blamed the peso’s most recent slide on “negative news” that has cast doubt on whether the American credit package for Mexico will materialize. The currency now has lost more than 42% of its value against the dollar in the past two months.

“Due to the complexity and the amount of the financial package announced, the negotiations have taken some time. But it is expected that . . . its conclusion will be announced in the coming days,” Ortiz said, adding that he will go to Washington to finalize it later this week.

The markets were also shaken by the news that one of the nation’s largest companies, the tourism and steel conglomerate Grupo Sidek, had defaulted on millions of dollar loans this week. The company said it had sufficient cash on hand but had decided to default on $19.5 million in corporate debt to fund ongoing operations. It will meet with creditors this week.

The peso tumbled to its second-lowest level in history on Wednesday, closing at 5.99 to the dollar. At the same time investors at the government’s weekly bond auction drove the prime lending rate set by bellwether 28-day Treasury bills, or Cetes, up 4.8 percentage points to 40%.

The Mexican nose-dive spread to other Latin markets. Argentina’s Merval stock index tumbled 6% and Brazil’s Bovespa index sank 3.8%.

Ortiz blamed the falloff on news reports that a small portion of the international bailout package had hit a snag. But analysts blamed the markets’ refusal to stabilize on a continuing lack of confidence in President Ernesto Zedillo’s government and a threat early in the week of guerrilla war in the southern state of Chiapas.

The peso’s Wednesday close was its lowest since Jan. 30, when the currency’s free fall to 6.3 helped convince President Clinton to abandon a $40 billion loan-guarantee package for Mexico that was stuck in the U.S. Congress.

Instead, Clinton announced a $20-billion credit line from the president’s currency-stabilization fund as an emergency move to neutralize Mexico’s worst economic crisis in more than a decade. The credit line was part of a $50.76-billion international rescue package.

Mexico’s stock market, buoyed temporarily after Clinton announced the credit package two weeks ago, plunged 6.4% Wednesday, closing at 1,798--a 17-month low--partly on concerns about Grupo Sidek.

The firm was the first Mexican company to miss a debt payment since the nation’s latest financial crisis began on Dec. 20. But it spread fear that other Mexican corporations, faced with paying off tens of billions in dollar debts with devalued pesos, soon would follow suit.

The Bolsa had gained briefly last week when Zedillo announced a crackdown on the Zapatista National Liberation Army guerrillas in Chiapas.

But as the president backed off and launched a new peace offensive with the rebels on Tuesday, market analysts said the apparent indecisiveness helped drive away tens of millions of dollars in foreign investment.

Independent analysts said the currency’s tailspin this week is proof that Mexico’s financial crisis cannot be solved until confidence is restored in Zedillo’s government.

Tuesday’s auction of dollar-denominated Treasury bonds, known as tesobonos, was a further sign of declining confidence. Investors bought only $240 million in new tesobonos to replace about $779 million of notes due to mature this week.

As markets fell Wednesday when the peso-based Cetes were sold at a record high of 40%, concern deepened among Mexican industrialists that the government’s program for coping with the financial crisis is pushing the nation into a recession.

Production has begun to drop sharply along with demand, as wage increases remained frozen at 7% for the year and prices continue to rise sharply even for basic staples. Sugar producers announced an across-the-board 10.8% price increase, which they said was needed to meet costs. And major fish producers hiked the price of tuna 9%.

As one key industrial barometer, Mexico’s National Assn. of Bus, Truck and Tractor Producers announced that domestic sales had dropped 84.8% during January. The association, which represents all major heavy-vehicle manufacturers, said that just 408 vehicles were sold that month, compared to 1,695 in January of 1994.

In Washington, reports of Mexico’s latest turmoil were met with expressions of confidence in the economy--much as the initial weakening of the peso was greeted nearly two months ago.

Treasury officials would not comment on the record, but they indicated that they view the latest problems as the sorts of fluctuations anticipated during any volatile period.

An aide to a member of Congress linked to the effort to bail out the Mexican economy, however, expressed greater skepticism, tying the falling peso to Mexican officials’ unsuccessful efforts to stabilize their nation’s economy and political life.

* CHIAPAS ACTIONS: President Zedillo’s “peace offensive” takes shape. A1