Argentine stocks rally as bonds lift banking shares
BUENOS AIRES Nov 4 (Reuters) - Argentine stocks rallied in afternoon trade on Tuesday as banking stocks bounded higher thanks to a recovery in sovereign debt prices.
The benchmark MerVal .MERV stocks index was trading up 5.3 percent at 1,114.07 points in its sixth straight session of gains.
"We're seeing investors reshuffling their portfolios and putting banks at the forefront," said Claudio Szlaien, an analyst at Marlon Financial Resources.
Banking sector gainers included Banco Macro (BMA.BA: Cotización), which climbed 6.9 percent and Grupo Financiero Galicia GFG.BA, up 6.2 percent.
Argentine banks are among the biggest holders of government bonds traded on the local market, which were up 3 percent on average. They rose more than 6 percent on Monday.
Tuesday's strongest performers were led by dollar-denominated Discount paper ARDISCP=RASL, up by about 5 percent.
Local Argentine debt prices fell 60 percent on average last month because of the global financial crisis and a government plan to take over private pension funds, but bargain-hunting has boosted them in recent sessions.
The peso strengthened in light trade due to new central bank restrictions on short-term financial operations and perceptions that the dollar had peaked, traders said.
Under the rules announced on Monday, banks must hold onto bonds and stocks for at least three days. The measure aims to curb short-term buying and selling that causes abrupt movements in financial markets.
The peso was up 0.9 percent at 3.3525/3.3550 per dollar in formal trade between banks ARS=RASL where the Central Bank routinely intervenes with sales or purchases of dollars.
In informal trade between foreign exchange houses, as measured by Reuters, the peso was up 0.7 percent at 3.3950/3.4050 per dollar ARSB=. (Reporting by Jorge Otaola and Walter Bianchi; Writing by Helen Popper; Editing by Tom Hals)
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