Argentine stocks, bonds up after tax rise rejected

jueves 17 de julio de 2008 17:30 ART
 

(Updates with closing prices)

BUENOS AIRES, July 17 (Reuters) - Argentine stocks closed moderately higher on Thursday, while the peso firmed and bond prices rose after the Senate rejected a controversial government tax rise on soy exports.

Despite uncertainty over the government's next step, markets generally welcomed the Senate vote against a measure that sparked four months of farm protests in Argentina, a major global supplier of soy, corn, wheat and beef.

The MerVal .MERV benchmark stocks index ended up 0.85 percent at 1,893.43 after rising by as much as 2.8 percent earlier in the session.

"Shares in banks, service companies and firms linked to the farm sector were the ones that rose the most, while energy-related shares fell" on lower crude oil prices, said Antonio Cejuela, an analyst at Puente Hermanos brokerage.

Gains were led in part by food producer and grains exporter Molinos Rio de la Plata (MOL.BA: Cotización), whose shares jumped 6.9 percent to end at 9.25 pesos.

Trading volume on the MerVal was a modest $29 million. Among active issues, 72 rose, 17 fell and 17 were unchanged.

BONDS RISE, PESO FIRMS

Meanwhile, Argentine bonds traded on the local market also got a boost, closing about 1 percent higher on average in over-the-counter trade. The farm conflict dealt a severe blow to debt prices since March.   Continuación...