Argentine stocks, bonds hit by U.S. rate cut

martes 11 de diciembre de 2007 17:33 ART

BUENOS AIRES Dec 11 (Reuters) - Argentine stocks and bonds fell on Tuesday after the U.S. Federal Reserve cut interest rates by a quarter percentage point, a move expected by markets but which some investors had hoped would be more aggressive.

The MerVal index .MERV of 25 leading stocks gave up 0.64 percent to close at 2,230.43 points. Volume was moderate at $23 million. Of active issues 58 declined, 53 gained and six were unchanged.

Among the biggest percentage losers of the session was bank BBVA Banco Frances FRA.BA, down 3.14 percent at 8.96 pesos per share. Leading telephone company Telecom (TEC2.BA: Cotización) dropped 3.1 percent to 15.65 pesos per share.

The Federal Reserve bank cut the federal funds rate to 4.25 percent from 4.5 percent, the third consecutive reduction in the key rate.

Before the rate cut announcement the MerVal had been up 0.86 percent.

"Since traders were expecting a half-percentage cut, it's reasonable that the trend changed," said Dionisio Corneille, director of Corneille Sociedad de Bolsa.

Sovereign debt on the local market fell 0.7 percent on average, after rising early in the day, with the dollar-denominated Discount paper off 0.9 percent.

The peso currency firmed 0.16 percent in informal trade between foreign exchange houses to 3.1450/3.1475 per U.S. dollar ARSB= as measured by Reuters. In interbank trade where the Central Bank intervenes, the peso closed unchanged at 3.1375/3.1400 ARS=RASL per dollar. (Reporting by Walter Bianchi, writing by Fiona Ortiz; Editing by Jonathan Oatis)