* Bonds slip as Central Bank tensions weigh
* Stocks fall on political row, global selling
* Peso inches higher in light trading
By Jorge Otaola
BUENOS AIRES, Jan 12 (Reuters) - Argentine bonds and stocks fell in midday trade on Tuesday due to persistent investor concern over a dispute at the Central Bank sparked by the government’s plan to use reserves to pay debt.
Sovereign debt traded over the counter in Buenos Aires was down 0.7 percent on average, dragged down by dollar-denominated Boden bond due in 2014 ARBODEN14D=RASL, which was trading down 2.4 percent to an ask price of 32.00.
“There’s no doubt that the conflict is already leading some investors to reshuffle their debt portfolios because they don’t see a swift resolution to the reserves issue,” said Hernan Labrone, an analyst at the Fenix Compania Financiera brokerage.
The same Argentine judge who blocked the government’s reserves plan and ordered the reinstatement of the sacked Central Bank’s chief, effectively extended the deadlock on Monday by turning the legal wrangle into an ordinary judicial case.
That means it could take much longer for the courts to rule on the issue, which has rattled Argentine markets and ended a price rally by government bonds.
The risk spread on Argentine bonds widened by 27 basis points to 708 basis points over comparable U.S. treasuries, according to the benchmark J.P. Morgan Emerging Market Bond Index 11EMJ, far more than other emerging market countries.
Stocks .MERV were down 1.38 percent at 2,285.72 points, affected by domestic political jitters and the influence of selling in other global equity markets.
In the foreign exchange market, the peso firmed lightly against the U.S. dollar in thin trade monitored closely by the Central Bank, traders said.
In formal interbank trade ARS=RASL, the peso currency was up just 0.07 percent against the dollar to 3.79/3.7925. In informal trade between foreign exchange houses ARSB=, it was trading 0.26 percent higher at 3.855/3.86 peso per dollar. (Writing by Helen Popper, Editing by W Simon )