Mexico peso firms

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Stocks rebound from early falls. Mexico's peso firmed sharply Wednesday and bonds rose as investors welcomed oil industry reform legislation and a government plan to bolster local money markets, while stocks also rose.

The peso strengthened 0.77 percent to 12.925 per dollar while the yield on the government's benchmark 10-year peso bond fell 26 basis points to 9.12 percent.

The IPC stock index jumped 3.64 percent to 19,311 as gains in Wal-Mart de Mexico and the broader market more than offset losses at telecommunications giant America Movil.

Congress approved a long-debated overhaul of Mexico's slumping oil industry Tuesday, raising hopes the country may be able to staunch a steep decline in oil production.

Earlier this week the government temporarily slashed long-term debt issues and pump billions of dollars into local money markets, spurring a three-day rally in Mexican bonds.

Other measures in recent weeks include short-term financing from the central bank, billions of dollars from government banks to back the commercial paper market and $13.1 billion in dollar auctions by the central bank to prop up the peso.

“What they have been doing over the last couple of weeks is starting to pay dividends,” said Nick Chamie, head of emerging markets research at RBC Capital Markets in Toronto.

Mexico's peso this month saw its steepest declines since a 1995 currency crisis and bonds were battered as investors dumped emerging market assets amid a global financial crisis.

In equities trading, top retailer Wal-Mart de Mexico, or Walmex, gained 5.06 percent to 35.71 pesos.

Analysts say Walmex is reemerging as the safest bet among Mexican retailers as the financial turmoil poses a threat to the sector, with Walmex's main competitor Soriana facing debt worries and retailer Comercial Mexicana seeking court protection from creditors.

Shares of Cemex, the world's No. 3 cement maker, jumped 7.69 percent to 9.10 pesos while its stock on Wall Street climbed 9.41 percent to $7.09.

Partially offsetting gains, shares of America Movil , the largest cell-phone operator in Latin America and the heaviest weighted stock on the IPC, shed 2.98 percent to 17.93 pesos while its stock in New York lost 1.53 percent to $27.60.

America Movil on Tuesday posted a 31.6 percent jump in net profit, but Banamex said in a report that the company's revenues per user dipped in Mexico.