Mexico peso slips from 16-mth high, stocks flat

MEXICO CITY, March 8 (Reuters) - Mexico's peso slipped on Monday after closing at a 16-month high last week, and stocks were little changed as investors digested comments from France's president on possible aid for Greece.

The peso MXN=MEX01 lost 0.3 percent to 12.6635 following strong gains last Friday after fewer-than-expected U.S. job cuts in February supported optimism for economic recovery in the United States, Mexico's top trading partner.

The IPC stock index .MXX added 0.04 percent to 32,450 following its close at a six-week high last Friday.

"The dollar is strengthening, but it is within a very tight margin. It does not seem like the market wants to take a clear direction," said Eduardo Avila, an analyst at brokerage Monex in Mexico City.

French President Nicolas Sarkozy promised on Sunday that euro zone countries would help Greece if its financial problems worsened.

The news supported the euro early in the Monday session, but the U.S. dollar clawed back those gains. Concerns over Greece's debt troubles have weighed on the euro and emerging market assets in recent weeks.

"Just because Greece may get some aid does not mean they have made it to the other side," Avila said.

Traders said the peso's losses Monday were largely driven by a technical rebound after the currency failed to decisively break the 12.60 level.

Mexico's peso has gained around 4.6 percent from a low hit in early February, helped by signs of a stronger-than-expected rebound in Mexican exports.

Morgan Stanley economists on Monday raised their growth outlook for Mexico to 5.2 percent in 2010 from a previous call of 3.8 percent.

"The Mexican economy is likely to expand more than 5 percent this year, representing the strongest rebound among the region's major economies," Morgan Stanley wrote in a note to clients.

In stock trading, shares in bank Banorte (GFNORTEO.MX) added 3.09 percent top 51.41 pesos.

Top retailer Wal-Mart de Mexico (WALMEXV.MX) shed 2.4 percent to 61.80 pesos. Walmex hit an all-time high last week, representing a 135 percent jump from a low in March 2009, and some analysts have recently questioning whether the stock may have gained too much, too quickly. (Reporting by Michael O'Boyle and Jean Luis Arce; editing by Jeffrey Benkoe)