Argentine markets tank amid global sell-off

lunes 6 de octubre de 2008 12:40 ART

BUENOS AIRES Oct 6 (Reuters) - Argentine stocks, bonds and peso suffered heavy losses on Monday amid a global market sell-off sparked by fears of a worldwide economic recession.

The MerVal index of leading shares .MERV was trading 9.16 percent lower at 1,374.09 points, after shedding more than 11 percent earlier in the session.

Losses were led by index heavyweight Tenaris (TENA.BA: Cotización), which makes steel tubes for the energy industry and was down 13.6 percent at 45.70 pesos a share.

Tenaris tends to fall along with U.S. crude oil futures, which sank on concerns of slowing global oil demand.

Meanwhile, Argentine bonds traded locally shed 5 percent on average in over-the-counter trade. Dollar-denominated Bonar X bonds ARBONAR17D=RASL took the biggest hit, shedding 12.7 percent according to the ask price.

Argentina's debt spreads over similar U.S. Treasuries widened 107 basis points to 1,147 on the JPMorgan Emerging Markets Bond Index Plus (EMBI+) 11EMJ.

The peso currency shed 1.1 percent in interbank trade to 3.1950/3.1975 per dollar ARS=RASL, sinking to levels not seen since May 2002. This market is heavily regulated by the central bank.

In informal trade between foreign exchange houses, as measured by Reuters, the Argentine peso fell 1.8 percent to 3.2300/3.2350 per dollar ARSB=, levels reached in mid-May of this year amid a tax revolt by farmers.

The central bank on Monday raised interest rates on short-term loans to banks BCRA05 by 75 basis points in a measure aimed at safeguarding deposits.

It also said it will expand its daily buybacks of notes and bills by up to 50 percent to boost liquidity in the market. (Reporting by Walter Bianchi and Hilary Burke; Editing by Diane Craft)