Mexico stocks gain on Fed bets; peso slips

(Recasts, adds comments and debt movement)

MEXICO CITY, Nov 4 (Reuters) - Mexican stocks jumped on Wednesday as investors expected the U.S. Federal Reserve to maintain its commitment to ultra-low interest rates, while the peso slipped, hurt by worries of a possible debt downgrade.

The IPC stock index .MXX climbed 1.74 percent to 29,388 while the peso MXN=MEX01 slipped 0.45 percent to 13.32 per dollar even as the U.S. currency broadly weakened.

The Federal Reserve -- the U.S. central bank -- is widely expected to keep in place its pledge to keep interest rates near zero for an "extended period", which could weaken the appeal of the dollar and boost riskier assets.

"The markets are really focused on the Fed. Many expect that they will express their intention to leave rates alone for a long period," said Jose Arturo Tobias, a strategist at Bulltick brokerage firm in Mexico City.

Also helping was data showing the U.S. services sector grew in October for a second straight month, while U.S. companies cut jobs last month at the slowest pace in more than a year.

Mexico sends more than 80 percent of its exports to its northern neighbor and it is counting on a rebound in the U.S. economy to pull it out of a deep recession.

Shares of America Movil (AMXL.MX), Latin America's biggest wireless operator, rose 1.81 percent to 30.42 pesos.

Cement company Cemex (CMXCPO.MX) rose 3.69 percent to 14.60 pesos, helped by optimism on its industry after a strong quarterly report from its global rival Heidelberg Cement (HEIG.DE).

Currency traders said the peso was hurt by speculation that Wall Street ratings agencies could cut the country's debt rating after lawmakers passed watered-down reforms that may not sufficiently curb the government's dependence on oil income.

"The peso is the underperforming of all the emerging market currencies ... we still have to see the decision of the ratings agencies and that is affecting us," said a currency trader in Mexico City.

Standard & Poor's and Fitch Ratings, which both have Mexico on a negative outlook, have said they will wait to issue any decisions until lawmakers approve the spending side of the budget, expected later this month.

"A long as they do not pass something concrete, we are going to be stuck," said Alejandro Rocha, a trader at Bansi in Mexico City.

The government's benchmark 10-year peso bond MX10YT=RR bid up 6 basis points to yield 8.06 percent. (Reporting by Michael O'Boyle, Editing by Chizu Nomiyama)