Argentine markets deepen losses as gloom persists

jueves 9 de octubre de 2008 17:56 ART

BUENOS AIRES Oct 9 (Reuters) - Argentine stocks, bonds and the peso currency took another beating on Thursday as investors dumped riskier assets and turned to safe-haven dollars due to the global financial turmoil.

The benchmark MerVal index .MERV closed down 5 percent at 1,287.33 points, its lowest level since April 2005 and a sixth straight loss. Earlier in the session, the index rose by as much as 3.2 percent but Wall Street's slump sent it lower.

"There's not much we can do when the Dow Jones .DJI has such a sharp change of direction," said Guido Macchi, a trader at the Julio Macchi brokerage. "While Wall Street is this volatile, prices will continue to fall."

Among the biggest losers was index heavyweight Tenaris (TENA.BA: Cotización), the world's top producer of seamless steel pipes for the energy industry. It plunged 7.6 percent to 42.5 pesos per share.

Trade volume on the broad market was a moderate $38.5 million and of active shares, 80 retreated, 14 rose and 10 were unchanged.

The peso extended its losses and dipped to levels not seen since January 2003 due to strong dollar-demand from savers and companies. The currency eked out a gain in the previous session as the central bank pumped greenbacks into the market.

In informal trade between foreign exchange houses, as measured by Reuters, the peso weakened 0.9 percent to end at 3.32/3.33 per U.S. dollar ARSB=.

In formal trade between banks ARS=RASL the peso slipped 0.31 percent to end at 3.23/3.2325 per dollar. The central bank intervenes in the interbank market to avoid abrupt movements in the value of the peso.

Argentine bonds closed down 0.8 percent on average in over-the-counter trade after rising by as much as 2.5 percent in opening trade, extending the average 5 percent loss racked up in the prior session.

Hardest hit was peso-denominated Discount paper ARDISCP=RASL, which slipped 2.8 percent according to the ask price.

Argentina's debt spread over similar U.S. Treasuries widened 49 basis points to 1,343 on the JPMorgan Emerging Markets Bond Index Plus (EMBI+) 11EMJ. (Reporting by Jorge Otaola and Walter Bianchi; Writing by Helen Popper, Editing by Chizu Nomiyama)