Mexico stocks gain on U.S. data, cheaper oil

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MEXICO CITY, July 8 (Reuters) - Mexican stocks rose on Tuesday as surprisingly strong U.S. consumer credit and a pullback in oil prices calmed fears about the weak U.S. economy, while the peso firmed on bets of a rate hike.

The benchmark IPC stock index .MXX closed 0.59 percent higher at 28,551.25 after briefly dropping 1 percent.

The peso <MXN=> MEX01 firmed 0.11 percent at the central bank's final 1:30 p.m. (1830 GMT) reference to 10.338 per dollar. The currency made further gains to 10.3155 per dollar.

Traders said a drop of more than $5 a barrel in the price of U.S. crude CLc1 eased some fears that high fuel costs will crimp consumer spending in the United States, Mexico's chief trading partner.

On top of that, U.S. consumer borrowing in May rose by a larger-than-expected $7.78 billion, which bolstered views that U.S. consumers were not pulling back on spending.

Mexico's economy is closely tied to spending in the United States, where Mexico sends about 80 percent its exports.

Traders also said equities were helped by a message from Federal Reserve Chairman Ben Bernanke that said the U.S. central bank may keep an emergency lending facility for Wall Street firms open longer than it initially intended.

That helped beaten-down financial stocks gain in the United States. But traders said it was also a signal the Fed is fearful of shutting down a vital backstop, and could signal further credit troubles ahead.