Mexico stocks up on US recovery hopes; bonds gain

(Recasts, adds analyst comment, closing prices)

MEXICO CITY, June 18 (Reuters) - Mexican stocks rose on Thursday as jobs and manufacturing data in the United States revived hopes the recession there is stabilizing, while bonds rose ahead of an expected interest rate cut.

The IPC stock index .MXX closed up 0.79 percent to 24,340.65, breaking a three-session losing streak that knocked more than 5 percent off the index.

Continued claims for U.S. jobless benefits fell last week for the first time since January, dropping by 148,000, the biggest one-week drop in that series since November 2001.

The Philadelphia Federal Reserve's business activity index for the U.S. Mid-Atlantic region in June was still negative but was much better than economists' expectations and the survey's May reading.

"U.S. data is getting better ... Asia is bouncing back, we could be seeing in Mexico a similar upturn in a matter of months," said a strategist based in Mexico City.

The U.S. downturn has driven Mexico into a deep recession and recovery will depend on a rebound of the economy in the United States, Mexico's top trading partner.

Mexican industrial production data for April released on Wednesday showed a 13.2 percent year-on-year slump but seasonally adjusted output edged up 0.95 percent compared with March.

"The seasonally adjusted figure may be a better indicator of the sector's performance ... Industrial activity will continue to post negative annual readings, albeit at a lower pace, in the coming months," HSBC wrote in a report.

The peso MXN=MEX01 firmed from an early intraday low of 13.4750 to 13.3885 per U.S. dollar at the central bank's final 1:30 p.m. (1830 GMT) reference, and then slipped to 13.41 in afternoon trade.

In debt trading, the government's benchmark 10-year peso bond MX10YT=RR rose 0.595 of a point in price, pushing its yield down 9 basis points to 8.22 percent.

Mexico's central bank is expected to cut its key lending rate on Friday for the sixth straight month, with 17 of 23 analysts in a Reuters poll calling for a 50 basis-point cut to 4.75 percent. [nN18396755]

In the stock market, shares in cement maker Cemex (CMXCPO.MX) rose for the first time in four sessions, gaining 3.14 percent to 12.81 pesos, rebounding from an 18 percent loss through Wednesday on the sale of its Australian unit to raise cash for pressing debt payments.

Shares of ICA (ICA.MX), Mexico's top construction company, rose for the second session, adding 4.33 percent to 23.36 after being hit this week by news it plans to dilute its capital by about 30 percent by selling shares to finance infrastructure projects. (Reporting by Michael O'Boyle; Editing by Dan Grebler)