The main index of the Mexican Stock Exchange (BM), the S & P / BMV IPC, reached its highest level in more than three years and extended its streak of monthly increases due to an improvement in the outlook for the economy and the earnings of the companies, especially those that are called cyclical, such as those in the industrial sector.
On Monday, the Stock Market rose 1.69% to 50,885.95 points with a volume of 56.3 million securities traded. The day was characterized by having a reduced liquidity due to the fact that the financial market of the United States remained closed for the holidays of ‘Memorial Day’.
The index ended the month at its best level since January 29, 2018. During May, the indicator accumulated a 6% advance and made its fourth monthly gain. “In the interior, there were gains in 27 of the 35 stations in the sample, highlighting with gains from the issuing sectors of the sectors most sensitive to the economic cycle (Banorte, BanBajío, Elektra, Peñoles, Grupo México and Cemex, among others), as it was observed in the United States ”, highlights Gabriela Siller, director of Economic-Financial Analysis at BancoBase.
On Wall Street, the Dow Jones and S&P 500 indices accumulated an advance of 1.93% and 0.55%, respectively, during the month, while the Nasdaq fell 1.53%.
In May, “the market was particularly attentive to some factors that could affect the monetary policy of the Federal Reserve in the United States. In particular, there were volatile reactions to economic indicators of prices and employment in the United States, ”says Siller.
For its part, the peso depreciated slightly on Monday, although it also extended a streak of monthly gains. The local currency was trading at 19.9280 per dollar near the end of the session, down 0.12% compared to 19.9050 in the Reuters reference price on Friday. The peso registered its third consecutive monthly rise, of 1.5%. So far this year it accumulates a decline of 0.3%.
The slight depreciation of the peso on the day occurred after last week a key indicator of inflation in the United States showed a higher price increase than expected, keeping alive bets that the Federal Reserve could modify its monetary policy, a theme that will continue to live in the following weeks.
Investors are also awaiting the local elections to be held next Sunday, in which the Chamber of Deputies and various state governments will be renewed.
The elections are considered key because they will determine whether the party of President Andrés Manuel López Obrador and his allies will continue to dominate the lower house. If so, the president would have no major obstacles to continue promoting reforms in the second half of his term.
With information from Reuters.
