Argentine bonds rise on buys from state-run banks
BUENOS AIRES Aug 12 (Reuters) - Argentine bonds inched higher in trading on Tuesday, helped by purchases from state-run banks a day after ratings agency Standard & Poors cut Argentina's sovereign debt ratings, traders said.
Locally-traded Argentine bonds were up around 0.7 percent in early over-the-counter trade.
"Bonds are being pressured by a sell-off from investors who worry about the government's official statistics (on the economy), but prices are higher because of buys from state-owned banks," said one trader who asked not to be named.
The benchmark MerVal stock index .MERV sagged 0.66 percent to 1,697.70 points at 1515 GMT (1215) local time,
On Monday, S&P downgraded 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 MerVal stock index deepened losses in late trading on Monday after the announcement, which also trimmed gains bonds in informal trade after the market closed, traders said.
Yields on Argentina's foreign-currency-denominated bonds narrowed 10 points on Tuesday to 658 basis points over U.S. Treasuries, according to JPMorgan's Emerging Markets Bond Index Plus (EMBI+) 11EMJ .JPMEMBIPLUS.
Hoping to counter investor pessimism over the country's economic management reflected in a fall in Argentine bond prices late last week, the Economy Ministry on Sunday said it would buy back some 2008 and 2009 debt, triggering a rally in bonds on Monday.
On the foreign exchange market, the Argentine peso currency was stable in light trade. Continuación...