Mexican Stocks Fall on Fear of Political Crisis
A drive to oust this city’s leftist mayor from the 2006 presidential race fueled heavy selling of Mexican stocks and bonds Tuesday in fear of a full-blown political crisis.
Mexico’s IPC stock index tumbled 292.68 points, or 2.3%, to 12,300.70, the lowest closing value since Jan. 11. Yields surged on government bonds as the prices of the securities fell.
With thousands of protesters expected in the capital Thursday, some analysts worry that the turmoil could trigger an economic slowdown.
Congress is expected to vote Thursday on whether to strip Andres Manuel Lopez Obrador of his legal immunity so he would have to face contempt of court charges. If found guilty, the popular mayor could be banned from running for president.
Lopez Obrador, who leads in the polls, dismisses the charges as an attempt to remove him from the race by President Vicente Fox and business leaders.
The uproar has frightened investors who have reaped hefty gains in Mexican stocks over the last two years. Some analysts warned clients Tuesday not to take the situation lightly.
“I have rarely been as concerned as I am today regarding the course of political events unfolding in Mexico,” Gray Newman, head Latin America economist for brokerage Morgan Stanley, wrote in a report.
Start your day right
Sign up for Essential California for news, features and recommendations from the L.A. Times and beyond in your inbox six days a week.
You may occasionally receive promotional content from the Los Angeles Times.
