--IPC stock index up 0.3% in early trade
--Markets lifted by news of European Union loans for Spain
--MXN modestly stronger vs. USD in cautious trade
By Amy Guthrie
MEXICO CITY--Mexican shares opened higher Monday, joining a global-market celebration following Spain's weekend agreement to seek bailout funds for its banks.
The IPC index of Mexico's most-traded shares was recently up 114 points, or 0.3%, to 37438 on volume of 16 million shares, valued at 286 million pesos ($21 million). The peso was also modestly stronger against the U.S. dollar, at MXN13.9275 compared with MXN13.9385 at the close Friday.
European markets traded sharply higher after Spain agreed to an aid package of as much as 100 billion euros ($125 billion) in loans from the European Union to assist its banks, although stocks came off highs as investors looked more critically at the bailout accord.
"While it can be argued, and we will, that the amount will likely prove insufficient...the most important thing today is that European officials have innovated and responded," Brown Brothers Harriman said in a note.
Mexican brokerage Banorte-Ixe warned that the relief rally caused by news of aid for Spain may only be temporary. The brokerage recommends light exposure to Mexican equities given likely further headwinds from Europe and signs of slowing global growth.
Among Mexican blue chips early Monday, wireless carrier America Movil SAB (AMX, AMX.MX) was gaining 0.6% to MXN16.56, while cement maker Cemex (CX, CEMEX.MX) was rising 1.5% to MXN7.69 and retailer Wal-Mart de Mexico SAB (WMMVY, WALMEX.MX) was up 0.4% to MXN34.95.
In local economic news, Mexican industrial output maintained a healthy rate of growth in April, expanding 3.6% from a year earlier with gains in manufacturing and construction offset slightly by lower oil production.
The 3.6% increase from April 2011 was below the 4.5% median estimate in a Dow Jones Newswires survey of eight economists, but above the 3% year-on-year rate registered in March.
Write to Amy Guthrie at email@example.com.