Argentina stocks lifted by Brazil upgrade, peso dips

viernes 2 de mayo de 2008 18:02 ART

BUENOS AIRES May 2 (Reuters) - Argentine stocks rose on Friday as Brazilian companies listed in Buenos Aires got a boost from their home country's new investment grade rating and government bonds bounced back from recent losses.

The peso weakened in interbank trade in heavy volume of $950 million, the highest since Argentina de-linked its currency from the dollar in 2002.

Dollar demand was high due to worries over ongoing conflict between the government and the huge agricultural industry.

The MerVal index .MERV of leading stocks gained 0.57 percent to 2,107.63 points. Volume on the broad market was moderate at $30 million and of active issues, 73 advanced, 37 declined and 17 were unchanged.

Petrobas Participaciones PCH.BA, the Argentine unit of Brazil's state-owned Petrobras, rose 5.1 percent to 4.09 pesos per share, both on Brazil's new investment grade and higher oil prices.

Brazil won a much-coveted investment-grade rating for the first time on Wednesday, from Standard & Poor's, signaling confidence in investing in its debt and companies.

Grupo Financiero Galicia (GFG.BA: Cotización), which owns the country's largest bank, rose 0.5 percent to 2.01 pesos per share. Banks have heavy holdings in government debt.

"The Merval was helped by the rebound in government bonds, which lifts bank stocks, although in low trading volume," said Dionisio Corneille, head of his own brokerage.

Some of Argentina's peso-denominated bonds recovered on Friday after being hit hard by the ongoing political crisis between the government and the powerful agricultural sector over export taxes.   Continuación...