UPDATE 1-Argentine stocks rally to highest level since 2007
(Adds details, bond prices)
BUENOS AIRES Jan 4 (Reuters) - Argentina's stocks reached their highest intraday level since 2007 in midday trade on Monday as banking issues rallied on expectations about a government debt swap expected in late January.
The pending swap offer lifted sovereign bond prices, which benefits local banks, among the biggest holders of government bonds.
The benchmark stock index Merval .MERV was up 3 percent to 2,389.96, it highest intraday level since the index closed at a record high of 2,339.77 in October 2007.
Among the biggest gainers were leading Argentine banking conglomerate Grupo Financiero Galicia (GFG.BA: Cotización), up 1.86 percent to 2.19 pesos and large retail bank Banco Macro (BMA.BA: Cotización) up 5.58 points to 11.35 pesos.
Argentina expects to launch in late January a swap to mop up $20 billion in defaulted bonds, as part of an effort to clean up problems left over from its massive sovereign default eight years ago. For details see [ID:nN04218547]
Bond prices rose 0.90 percent, on average, led by the dollar-denominated Boden 14 ARBODEN14D=RASL which climbed 3.7 percent to 33.50.
Traders said stocks were also boosted by a weak U.S. dollar and higher oil prices, which lifted oil-sector companies. Market heavyweight Tenaris (TENA.BA: Cotización), a global leader in steel products for the oil industry, rose 3.87 percent to 83.80 pesos. (Reporting by Jorge Otola; Writing by Luis Andres Henao; Editing by Fiona Ortiz and Padraic Cassidy)
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