By Carla Mozee
Mexican stocks rose Tuesday, in step with gains on Wall Street as investors' fears about mounting debt in Greece cooled and as better-than-expected economic reports were issued in the U.S.
Mexico's IPC index rose 2% to 31,644, its best finish since Jan. 20, with assistance from the mining, finance, retail and manufacturing sectors. Shares of engineering and construction firm Empresas ICA (ICA) as its shares climbed 3.9%. Also, shares of cement maker Cemex (CX) rose 2.2% and retailing giant Walmex (WMMVY) rose 2.4%.
On Wall Street, which is closely tracked by investors in Mexican securities, the S&P 500 Index (SPX) rose 1.8% and the Dow Jones Industrial Average (DJI) climbed 170 points, or 1.7%.
Traders snapped up equities after European Union officials granted Greece one month to show that its deficit-reduction plans are effective before they begin to ramp up pressure on the country to make further budget cuts.
The European currency also gained against the U.S. dollar, making dollar-denominated commodity prices more attractive to holders of other currencies. The dollar index (DXY) fell 0.8%.
The E.U. decision to give more time to Greece follows last week's pledge of support for the country by E.U. leaders, though details about the type of support they are willing to extend remain unclear. Finance ministers from all 27 E.U. nations were slated to meet for their monthly gathering on Tuesday.
The "events in Europe increased our confidence that a liquidity crisis [in Europe] will be mitigated and, while there is a longer-term question of solvency, the same could be said about bank credit a year ago," wrote Barry Knapp at Barclays Capital Research in a note to clients.
Greece's fiscal troubles, as well as concerns about sovereign debt in Spain and Portugal, have battered equities in emerging markets, including Mexico, in recent weeks as investors moved away from assets they perceive as risky.
Mexican stocks also found support from a New York Federal Reserve report that manufacturing activity in the region expanded in February. The Empire State Manufacturing index rose to 24.9 from 15.9 in January.
Separately, there was a slightly more optimistic reading from the U.S. housing market with the National Association of Home Builders' report that its builder-confidence index rose in February from January.
Better economic conditions in the U.S. benefit Mexico because Mexico sends about 80% of its products to the U.S.
Among exchange-traded funds, the iShares MSCI Mexico index fund (EWW) rose 2.5%.
Chile's IPSA rose 1.4% to 3,820.55 and Argentina's Merval gained 0.9% to 2,308.10.
Trading was closed in Brazil for the Carnival holiday.