LATIN AMERICAN MARKETS: Mexican Stocks Gain Ground After Rate Hike; Brazil Slumps

By Carla Mozee

LOS ANGELES (MarketWatch) -- Mexican stocks finished higher Friday after the central bank indicated that it may be near the end of its interest rate- tightening cycle, while a slide in energy prices sent Brazilian stocks lower.

Mexico's IPC index of the 35-most actively traded shares closed up 0.3% at 27, 340.83. The index ended the week with a rise of 0.8%.

Shares of interest-rate sensitive banking stocks were among the top advancers of the session. Banco Compartamos rose 5.1%, Grupo Financiero Banorte jumped 3.4%, and Grupo Financiero Inbursa rose 1.2%.

The Bank of Mexico hiked its key interest rate by 25 basis points to 8.25%, as widely expected. It marked the third consecutive quarter-percentage rise as the bank tries to fight off increasing inflation.

July's consumer price index in Mexico climbed to 5.39% from a year earlier, " too much for an economy which has a target of inflation of 3%," said Claudio Freitas, senior Latin American markets analyst at Zack's Equity Research, in a telephone interview Friday.

The Mexican peso was down slightly following the interest rate move, sending the U.S. dollar up 0.2% to 10.162 pesos late Friday.

Freitas said equities reacted positively to the central bank's accompanying statement, in which it said it projects further easing of food and energy prices and acknowledged the risks of an economic slowdown.

MARKET SNAPSHOT: U.S. Stocks Likely To Be Under The Influence Of Oil

By Kate Gibson

U.S. stock-market action next week is likely to take cues from the currency and commodities markets.

"The biggest driver we'll see in the market next week is the price of a barrel of oil," said Art Hogan, chief market strategist at Jefferies & Co.

"Unless we get some crazy M&A activity on Monday, the only monkey wrench I see is some skeleton falling out of some financial closet, or something heats up in Georgia," Hogan said, referring to Russia's recent military conflict with its former Soviet Republic neighbor.

On Friday, stocks ended mostly higher, with the major indexes scoring mixed results for the week, with the Dow Jones Industrial Average (DJI) ended up 43.97 points at 11,659.90, giving it a weekly loss of 0.6%.

The broader indexes had a like finish, with the S&P 500 (SPX) climbing 5.27 points to close at 1,298.19, leaving it virtually flat from the prior Friday's close. The Nasdaq Composite (RIXF) fell 1.15 points to end at 2,452.52, giving the index a weekly gain of 1.6%.

Last week saw crude futures dip more than 1%, with strength in the U.S. dollar and ongoing concerns over global oil demand pressuring prices. September crude finished at $113.77 a barrel, down $1.24, or 1.1%, for the session and off 1.2% for the week.

The dollar's rally extended to multiple-month highs , while metals futures were pounded, with gold for December delivery falling $22.40 to close at $792.10 an ounce, a weekly loss of 8.4%. .