Mexican stocks jump on gains in retailers, peso up

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MEXICO CITY, March 31 (Reuters) - Mexico's peso strengthened sharply on Monday on expectations the central bank will not lower interest rates any time soon, and stocks surged more than 3 percent to a four-month high.

The benchmark IPC index .MXX gained 3.25 percent to 31,068 points and the peso MXN=MEX01 strengthened a sharp 0.50 percent to 10.642.

America Movil (AMXL.MX: Quote, Profile, Research), Latin America's biggest cell phone provider, added 2.39 percent to 33.87 pesos. Its New York traded shares (AMX.N: Quote, Profile, Research) gained 2.93 percent to $63.57.

Mexico's biggest retailer, Walmex (WALMEXV.MX: Quote, Profile, Research), gained 4.2 percent to 45.41 pesos.

"Sales at Walmex have been better than expected, so first-quarter results should also be up, and that's making people optimistic about the rest of the retailers," said Gerardo Copca, an analyst at Metanalisis consultancy. "If Walmex is having good results, so should Soriana."

Shares of retailer Soriana (SORIANAB.MX: Quote, Profile, Research) added 5.85 percent to 31.50 pesos.

In debt trading, long-term bond yields fell for the fifth day in a row. The price of the benchmark 10-year government peso bond MX10YT=RR rose 0.139 of a point to bid 102.055, pushing its yield down 2 basis points to 7.45 percent a five-week low.

Traders said expectations that Mexico's central bank would not move to cut interest rates until at least this summer was fueling the rush for peso assets.