Mexican Stocks Start the Year With a Record High

Mexican stocks ushered in the new year by rising more than 5% to a record close Tuesday as foreign and local investors bet that 1996 will be a better year for the beleaguered country.

The Bolsa’s leading IPC index broke its previous record, set nearly two years ago, rising 150.96 points to 2,929.43. Its previous high close was 2,881.17.

It was one of the best days for that market since an uprising and political assassinations rocked Mexico in 1994 and led to a peso devaluation late that year that threw the economy into crisis. Although stock prices are back to pre-devaluation levels, they are worth half as much in dollar terms as they were two years ago.

Analysts said the market is being helped by U.S. investors looking for opportunities. Despite having been hurt before, they are again being tempted by high-yield but high-risk emerging markets such as Mexico, gambling on further U.S. interest rate cuts and Mexico’s recovering economy.

* INVESTOR SPOTLIGHT: Two-year chart of the Bolsa, D7