Argentine stocks dragged down by energy losses

lunes 11 de agosto de 2008 18:26 ART

(Updates with close, adds peso, bonds)

BUENOS AIRES Aug 11 (Reuters) - Argentine stocks slumped to their lowest level in 22 months on Monday, taking a hit from falling oil prices and a decision by credit rating agency Standard & Poor's to cut the country's sovereign debt ratings, traders said.

Locally-traded bonds had closed when the S&P announced the downgrade, but in informal after-hours deals they trimmed earlier gains fueled by a government decision to buy back bonds. The Argentine peso also firmed.

The benchmark MerVal index .MERV ended down at 1,708.95 points, its weakest showing since October 2006.

Index heavyweight Tenaris (TENA.BA: Cotización) (TS.N: Cotización) (TENR.MI: Cotización), the world's top producer of seamless steel tubes for the energy industry, saw its stock shed 8.2 percent, while Brazil's state-run energy firm Petrobras APBR.BA (PETR4.SA: Cotización), plunged 4.1 percent.

The MerVal's losses deepened after S&P cut its foreign currency long-term sovereign credit rating for Argentina by one notch to "B" from "B+", citing increased economic challenges such as inflation.

"The S&P (decision) was the blow the market needed to deepen the price losses," said Hernan Labrone, an analyst at the Fenix Financial Company brokerage.

On the broad market, trade volume was a modest $31.5 million. Of active shares, 60 retreated, 35 advanced and 13 were unchanged.

BONDS, PESO   Continuación...