Mexico peso, stocks gain on U.S. Fed's outlook

(Recasts, adds comments and closing stock prices)

MEXICO CITY, Aug 12 (Reuters) - Mexico's peso firmed on Wednesday and stocks gained after the U.S. Federal Reserve said it saw signs of a more stable economy in the United States, Mexico's top trading partner.

Better prospects for the battered U.S. economy bode well for recession-hit Mexico, which sends more than 80 percent of its exports to its northern neighbor.

The peso MXN=MEX01 rose 0.37 percent to 12.965 per U.S. dollar while the IPC stock index .MXX added 1.06 percent to 28,096.02 points. Stock trading was slow as many traders headed to bars to watch a highly anticipated soccer match between Mexico and the United States.

The Fed said the economy was leveling out, and it left interest rates unchanged at the close of its two-day policy meeting. For details see [ID:nN12462568].

"They are not saying the economy is roaring back but they are seeing improvement," said Kathryn Rooney, an emerging markets strategist at Bulltick Capital Markets in Miami.

Mexico's peso has lagged the gains of other emerging market assets during this year's rally, but some investors are betting the currency could outperform in the coming months.

Last week, the peso broke through the key level of 13 per dollar, boosted by an unexpected affirmation of Mexico's credit outlook by Moody's Investors Service and bets the U.S. recovery could help Mexico pull out of a slump quicker than other economies.

But the market is divided about the peso's prospects. Betrand Delgado, an economist at RGE Monitor in New York, expects sluggish U.S. growth will stunt Mexico's recovery from what appears to be its deepest recession since the 1930s.

In stock trading, shares in cement company Cemex (CMXCPO.MX) added 2.08 percent to 14.26 while America Movil (AMXL.MX), Latin America's top wireless operator, gained 1.04 percent to 29.27 pesos.

Shares in Coca-Cola bottler Femsa (FMSAUBD.MX) slipped 1.58 percent to 49.08 pesos on expectations profits will be hit by a spike in sugar prices, traders said.

Mexican stocks have also lagged gains in other markets. Traders say Mexico will have trouble closing the gap until Congress begins to discuss tax reform proposals in September.

"Everything will depend on if they develop a tax reform plan," said Gerardo Roman, head of stock trading at Actinver brokerage in Mexico City.

Standard & Poor's and Fitch are expected to downgrade Mexico's debt rating later this year if lawmakers do not curb the government's dependence on revenue from oil as production declines. (Reporting by Michael O'Boyle; Editing by Kenneth Barry)