Mexican companies whose stocks trade in the U.S. were rallying on the election Sunday of Vicente Fox Quesada. In beating incumbent President Ernesto Zedillo, Fox ended 71 years of Institutional Revolutionary Party rule.

Over the past 24 years, Mexico's presidential elections, which come every six years, have sent investors running for cover. The last poll, in 1994, heralded a mismanaged devaluing of the peso, rampant inflation and a gut-wrenching devaluation. The previous three elections also brought the economy to its knees.

But this time around, the economy is barreling forward, with GDP expected to grow 5% this year, a pickup in domestic demand fueling consumer businesses and loans, and the current tight monetary policy keeping inflation in check.

And where past polls have been characterized by scandal and violence, this one was, according to election monitor

Jimmy Carter

, "almost perfect." Carter told

CNN

, "This was an extraordinary demonstration that the Mexican people were mature and committed to democracy."

Lofty stuff, yes, but investors

like

democracy. It smacks of fairness, of freer markets, of all those things that we're going to be celebrating tomorrow. It also smacks of higher stock prices, with the benchmark

IPC

surging 397, or 5.7%, to 7345, its best level since April.

Telefonos de Mexico

( TMX) American depository receipts were up 10.1% on heavy volume.

Fomento Economico Mexicano

(FMX) - Get Report

, the brewer and soft-drink company better known as Femsa, was up 6.4%.

TV Azteca

(TZA) - Get Report

was up 6.6%. And

Grupo Iusacell

(CEL) - Get Report

was up 8.8%.

Today's action could be the start of a nice

long rally. Strategists were betting a few weeks ago that current economic conditions and fair elections would fuel optimism over Mexican stocks they see as very cheaply valued and set for strapping growth.

The IPC began to spin downward in March on the heels of the

Nasdaq Composite Index's woes and jitters over the U.S. economy and interest rates, and lately took further hits from fears of political instability following the elections. The index bottomed around 5600 in late May, but even with today's rally it remains more than 12% below its March highs.

The only bump in its way now is the direction of the U.S. economy and interest rates.