Argentine peso slides, stocks rebound at close

viernes 5 de diciembre de 2008 18:52 ARST
 

BUENOS AIRES Dec 5 (Reuters) - Argentina's peso extended its decline against the dollar on Friday as investors opted for the safety of greenbacks, while gains on Wall Street helped the local stock market rebound.

The benchmark MerVal index .MERV rose for a fourth consecutive session, by 0.76 percent to close at 1,005.34 points after falling by as much as 4.5 percent earlier in the session.

"Today's trade moved in time with the Dow Jones, with a strong recovery toward the close due to a surge of buying that focused on companies with a domestic emphasis," said Mariano Tavelli, a trader at the Tavelli & Co brokerage.

The MerVal's late recovery was led by media group Clarin (CLA.BA: Cotización), which rose 9.98 percent to 4.52 pesos per share and energy group Pampa Energia PAM.BA, up 4.76 percent to 1.1 peso.

Volume was modest at $14.5 million. Of active issues 23 advanced, 20 declined and 14 were unchanged.

Government debt traded on the local market fell 1.2 percent on average in cautious, light trade. The Par bond in dollars fell 2.9 percent, according to the ask price ARPARD=RASL.

Traders said few investment funds were active in the market, with most selling focused on dollar-denominated paper.

Global economic uncertainty continued to drive demand for dollars, which are seen as a safe haven by most Argentines.

The Central Bank has spent some $4 billion in reserves in recent months to slow the depreciation of the currency, but this week it has eased its intervention to let the peso weaken. A weaker peso makes Argentine exports more competitive.

The peso fell 0.94 percent in formal interbank trade to 3.47/3.475 per dollar ARS=RASL, its weakest level since January 2002 when Argentina devalued its currency.

In informal trade between foreign exchange houses, as measured by Reuters, the peso dipped 0.14 percent to 3.50/3.505 ARSB=, levels not seen since December 2002. (Reporting by Jorge Otaola; Writing by Helen Popper; Editing by Tom Hals)