BUENOS AIRES, April 21 (Reuters) - Argentine stocks rose on Monday as energy-related shares rallied on record high oil prices, canceling out losses among banking stocks that were hit by falling bond prices.
The benchmark MerVal stock index .MERV rose 0.69 percent to 2,201.62 points, racking up a gain of more than 4 percent in the last six sessions.
“The MerVal continued to recover due to energy companies, but the weakness of government bonds means this isn’t a market seeing a more widespread upswing,” said Marcelo Paccione, an analyst at ConsulCapital.
Argentine banks are major holders of sovereign debt, meaning falling bond prices hit their balance sheets.
Among Monday’s losers were Banco Patagonia PAT.BA, which fell 2.86 percent to 2.72 pesos per share and Banco Macro BMA.BABMA.N, down 0.75 percent to 7.96 pesos.
On the broad market, volume shrank to a modest $29.7 million. Of the active issues, 39 advanced, 41 declined and 13 ended unchanged.
On the debt market, government bonds <AR/BONOS> shed 1.75 percent on average as investors off-loaded riskier investments amid continued uncertainty over the conflict that led the country’s farmers to stage a three-week strike. They suspended the measure for talks for 30 days starting April 2.
“The bond market continues being punished the hardest for the increased uncertainty since the start of the farm conflict,” the consulting firm Portfolio Personal said in a report.
The session’s gainers were led by the dollar-denominated Discount bond, which fell 2.6 percent, and the Discount bond in pesos, which lost 2.4 percent.
The Argentine peso closed weaker due to firm demand for dollars among investors and private banks, traders said, adding that the absence of the central bank in the market meant the dollar demand could only be met by exporters’ sales.
In informal trade between foreign exchange houses, as measured by Reuters, the peso ARSB= depreciated by 0.23 percent to 3.2125/3.2150.
The peso weakened 0.31 percent to 3.1775/3.18 per dollar ARS=RASL in formal interbank trade, where the central bank regularly intervenes.
Reporting by Jorge Otaola and Walter Bianchi; Writing by Helen Popper