Mexico stocks up on Fed; peso hurt by ratings bets

(Adds comment and closing stock prices)

MEXICO CITY, Nov 4 (Reuters) - Mexican stocks jumped on Wednesday after the U.S. Federal Reserve maintained its stance to keep borrowing costs ultra-low, while the peso slipped on worries of a possible downgrade of Mexico's debt.

The IPC stock index .MXX closed up 1.88 percent to 29,430.51 while the peso MXN=MEX01 lost 0.33 percent to 13.304 even as the dollar broadly weakened.

The Fed kept in place its pledge to keep interest rates near zero for an "extended period," weakening the appeal of the dollar and boosting demand for riskier assets.

The Fed also said the economy has "continued to pick up" since its last policy meeting in September.

"The monetary stimulus will remain in place to keep strengthening the economic recovery," said Carlos Alonso, a trader at Interacciones brokerage in Mexico City.

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.

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.

Shares of America Movil (AMXL.MX), Latin America's biggest wireless operator, rose 1.87 percent to 30.44 pesos.

Cement company Cemex (CMXCPO.MX) rose 3.41 percent to 14.56 pesos, helped after a strong quarterly report from its global rival Heidelberg Cement (HEIG.DE).

While other emerging market currencies rallied on Wednesday, as the prospect of low U.S. interest rates increased the appeal of higher-yielding currencies, the peso weakened.

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 underperformer 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.

"As 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 5 basis points to yield 8.05 percent. (Reporting by Michael O'Boyle and Jean Luis Arce; Editing by Kenneth Barry)