Mexico peso boosted by Europe data; stocks flat

(Recasts, adds comments and share movement)

MEXICO CITY, Aug 13 (Reuters) - Mexico's peso firmed to a 9-month high on Thursday as appetite for higher risk assets grew after data showed Europe's biggest economies had exited recession.

The peso MXN=MEX01 traded 0.66 percent stronger at 12.86 per dollar. Earlier the currency hit 12.77, its strongest since November.

The IPC stock index .MXX rose 0.20 percent to 28,150.

Germany and France surprised markets by posting positive growth in preliminary second quarter estimates, earlier than policymakers and economists had expected.

The Mexican currency later pared gains after a report of weak U.S. retail sales in July suggested Mexico's battered exporters could face a bumpy road to recovery.

The unexpected drop in sales at U.S. retailers in July undercut optimism after the U.S. Federal Reserve said Wednesday it saw signs of a more stable economy in the United States, Mexico's top trading partner.

"I still wouldn't be surprised to see an even stronger peso, as long as we do not have a correction in capital markets," said a trader in Mexico City.

Investors are fretting over whether a real economic pickup will justify a recent rebound in the peso and Mexican stocks.

Mexico's peso has lagged gains in other emerging markets, due to worries of a sluggish U.S. recovery and expectations Mexico's debt could be downgraded later this year unless the government passes tax reforms.

But some strategists are betting the peso will outperform its peers in the coming months, as it benefits more from perceptions of a U.S. recovery.

"Intra-regional plays still look safest, with our bias still towards the Mexican peso over Brazil's real and the Colombian peso," HSBC strategist Clyde Wardle wrote in a report.

In stock trading, shares in Cemex (CMXCPO.MX), the world's No. 3 cement maker, gained 1.96 percent to 14.54 pesos, supported by recent news the world's No. 3 cement maker is close to refinancing some $14.8 billion in debt payments.

Shares in brewer and bottler Femsa (FMSAUBD.MX) slipped 1.51 percent to 48.34 pesos on expectations profits will be hit by a spike in sugar prices. Femsa shares have slid nearly 8 percent since Aug. 3 as sugar prices surged to a 28-year high.

(Reporting by Michael O'Boyle and Jean Luis Arce)