Mexican stocks closed higher on Friday after a benign US inflation reading supported views that the US Federal Reserve will not have to raise interest rates. The benchmark IPC stock index rose 0.23 percent to 31,151.05 points.
US inflation outside of food and energy rose only 1.9 percent in the 12 months through May, the smallest gain in more than three years and one likely to reassure the US central bank that price pressures are easing. "The US inflation data was good because it calmed down worries about inflation in the United States," said a stock trader in Mexico City.
The Fed kept benchmark interest rates steady after a policy meeting that ended on Thursday, but warned that inflation was still a concern. Traders said the data left markets more certain the Fed would not raise rates any time soon.
Tame US inflation relieves pressure on the Fed to raise rates, and steady US rates keep the shine on relatively riskier but higher-yielding emerging market assets like Mexican stocks.
Construction companies led the charge, with infrastructure firm IDEAL surging 4.79 percent to 16.85 pesos. Home builder Urbi jumped 5.38 percent to 49.38 pesos. Copper miner Group Mexico rose 1.12 percent to 65.96 pesos.
Shares of leading retailer Wal-Mart de Mexico (Walmex) rose 0.37 percent to 40.98 pesos. In bond trading, the price of the benchmark 10-year government peso bond lost 0.064 point to bid 101.919, pushing its yield up 1 basis point to 7.69 percent.
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