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Mexican Stocks Continue to Plunge as Rescue Plan Fails

November 18, 1987|Associated Press

MEXICO CITY — Stock prices on the Mexico City exchange, one of the world's fastest growing financial arenas for more than a year, continued falling Tuesday, a day after its leading index plummeted a record 18.32%.

Analysts attributed the plunge to investor disappointment that a market rescue plan, widely expected to be signed last week, apparently has foundered. They also pointed to boosts in interest rates that make other investments, such as government bonds, more attractive.

The 52-stock index of prices and quotations fell 8.85% on Tuesday, or 9,267.48 points, to 95,484.16. On Monday the index closed at 104,751.64, down 23,502.43 points from Friday.

Since peaking at 373,216.24 on Oct. 6, the index has lost 74.4% of its value as of Tuesday's close.

The financial newspaper El Financiero quoted investors as calling it "the blackest Monday in history" and asking what had happened to the widely discussed rescue plan designed to prop up the exchange.

"I believe that since there has been no injection of fresh resources, the market continues to decline," said stock exchange spokesman Guillermo Medina Arellano.

"They're really disappointed that there was no government rescue operation," said an analyst who spoke on condition he not be identified.

Brokerage houses, the government's central bank and Nacional Financiera, the government's development bank, last week were reported near agreement on a fund that would allow brokerages to buy stocks during a rash of selling.

The fund, expected to total around $600 million, was aimed at providing a floor to the volatile market, analysts said.

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