Argentine stocks hit record amid global optimism

viernes 26 de octubre de 2007 18:33 ART

BUENOS AIRES Oct 26 (Reuters) - Argentine stocks rose to a record high on Friday, two days before a presidential election, buoyed by optimism in global markets over a possible cut in U.S. interest rates, traders said.

The MerVal index .MERV of 25 leading stocks jumped 1.95 percent to 2,327.15 points, surpassing July's record high of 2303.43 points.

"Both the good international context and the strong liquidity prevailing on the local market paved the way for the upward trend to continue today," said Ruben Pascuali, a trader with Mayoral Bursatil.

Analysts expect the U.S. Federal Reserve to cut interest rates again at its upcoming meeting, thereby making riskier emerging markets holdings more attractive.

"The MerVal rose to new highs due to the good external context, but above all due to the strong impact of returning capital by pension funds," said Augusto Farina, a trader with Almirante Galitis brokerage.

The Argentine government announced last week that pension funds -- the most liquid players in the local market -- had to scale back their investments in other Mercosur countries to help expand credit for local firms and projects.

The Mercosur trade bloc includes Argentina, Brazil, Paraguay and Uruguay as full members.

The government move means the funds will have to bring 2.83 billion pesos ($877.5 million) back to the Argentine market before year's end.

Leading gains, steel pipemaker Tenaris (TENA.BA: Cotización) climbed 4.25 percent to close at 85.7 pesos per share, while entertainment group Comercial del Plata COM.BA jumped 5.1 percent to 0.72 pesos per share.   Continuación...