Mexico stocks, peso tumble as US bailout rejected

(Recasts; adds analyst's quote)

MEXICO CITY, Sept 29 (Reuters) - Mexico's peso fell to a one-year low and stocks shed more than 6 percent after the U.S. House of Representatives rejected a $700 billion bailout package for troubled banks.

The peso MXN= MEX01 fell 2.13 percent to close at 11.035 per dollar, while the benchmark stock index .MXX slipped 6.28 percent to 24,987 points.

Global markets extended losses after U.S. lawmakers rejected the bailout plan on the same day as Wachovia Corp became the latest U.S. bank to succumb to the global credit crisis and three European banks were thrown lifelines by governments.

"This has got a lot of people nervous and guys are just taking risk off the books," said Paul Biszko, a senior emerging markets strategist at RBC Capital Markets in Toronto.

Mexico's benchmark IPC stock index fell below 24,000 points, led by sharp falls in dominant cell phone operator America Movil AMXL.N (AMX.N), copper miner Grupo Mexico (GMEXICOB.MX) and Cemex (CMXCPO.MX) (CX.N).

Only two of 35 stocks in the IPC index were trading higher.

Grupo Mexico fell more than 20 percent and was briefly halted as copper prices plunged to an 18 month low in extended trading in New York. COMEX copper futures HGc1 fell sharply as investors pulled money from commodity markets.

Dominant cell phone operator America Movil (AMXL.MX) plunged 8.70 percent to 23.60 pesos, while its New York-listed shares (AMX.N) dropped 10.87 percent to $42.70.

Cemex tumbled 1.66 pesos to 17.80 pesos. Its New York-listed shares dropped 11.2 percent to $16.02.

Mexican fixed income markets were weaker but supported by buying from local firms even as foreign investors dumped the peso.

Mexico's benchmark 10-year government peso bond MX10YT=RR fell 0.556 of point to bid 95.274, pushing its yield up 9 basis points to 8.49 percent.

"Mexico has a rather developed local market so it doesn't mean that rates and currency have to go the same way. If I had to make a call I would say the central bank is going to have to cut rates," said Alberto Bernal, head of fixed income trading at Bulltick Capital Markets in Miami. (Reporting by Jason Lange and Robert Campbell; Editing by Theodore d'Afflisio)