2 MIN. DE LECTURA
BUENOS AIRES, Jan 11 (Reuters) - Argentine stocks were down on Monday while bonds edged higher in light trade marked by continued investor caution due to a row over government plans to tap foreign currency reserves to pay debt.
The benchmark MerVal stocks index .MERV was off 1.4 percent at 2,319.82 points extending losses earlier in the session, while the currency firmed slightly against the dollar. ARSB=
Bond prices were up by an average 0.2 percent in over-the-counter afternoon trade in Buenos Aires, as investors looked for bargains after last week's losses. Earlier in the day, debt prices rose by as much as 0.6 percent, on average.
The risk spread on Argentine bonds narrowed by 6 basis points to 679 basis points over comparable U.S. treasuries, according to the benchmark J.P. Morgan Emerging Market Bond Index 11EMJ.
President Cristina Fernandez fired the central bank chief, Martin Redrado, by decree last week after he refused to free billions of dollars in foreign reserves to pay the public debt -- a move the opposition says is unconstitutional.
A court reinstated Redrado and barred the government from tapping the reserves. A special Congress committee could meet later this week to discuss whether Fernandez overstepped her authority firing Redrado by decree. For details see [ID:nN11152117]
"It's clear that investors may not take decisions until the situation is resolved ... In this scenario (traders) prefer to make choices that don't carry high risk in Argentina, like oil companies," said a trader with Bull Market Traders brokerage.
Last year, Argentina's international debt was red hot, returning a 132.8 percent gain, according to the JP Morgan EMBI Plus. .JPMEMBIPLUS (Writing by Eduardo Garcia; editing by Jeffrey Benkoe)