Shares of Mexico's Homex jump at market open

MEXICO CITY (Reuters) - Shares of Mexican home builder Homex jumped early on Wednesday as a Merrill Lynch upgrade helped the company recover from steep losses the previous session.

Homex's American Depositary Receipts (HXM.N) rose 2.73 percent to $61.82 while local shares (HOMEX.MX) gained 2.55 percent to 111 pesos.

Merrill Lynch upgraded Homex stock to "buy" from "neutral," citing an attractive valuation compared with other sector peers. Homex shares fell 3.61 percent on Tuesday after a board member sold a significant part of his shares in the company.

The brokerage set a 135 peso 12-month target price per Homex share. The company's stock closed at 108.24 pesos on Tuesday.

Construction companies like Homex, which specializes in building massive developments of low cost housing, have grown quickly in recent years amid improved economic stability in Mexico and a greater availability of mortgages.

Mexican President Felipe Calderon, who began his six-year term in December, has promised to push for even faster growth in the housing sector.