Argentina stocks, bonds surge on global upswing

miércoles 28 de noviembre de 2007 18:03 ART

BUENOS AIRES Nov 28 (Reuters) - Argentine stocks and bonds jumped on Wednesday, rising in line with other global markets as expectations grew that the U.S. Federal Reserve would cut interest rates in December, traders said.

The MerVal index .MERV of 25 leading stocks rose 2.81 percent to 2,230.78 points, bouncing back from two straight days of losses.

Among the top percentage gainers of the day was power company Transener TRA.BA, which jumped 6.94 percent to 1.85 pesos per share. Transener accounts for a 2.05 percent weighting of the MerVal.

Volume on the broad market swelled to a hefty $77.9 million. Among active issues, 62 rose, 9 fell and 13 ended unchanged.

"The words of the Fed vice president fed a day of euphoria that the MerVal could not ignore," said Leopoldo Olivari, a trader with Bacque brokerage in Buenos Aires.

The U.S. Federal Reserve's No. 2 official, Donald Kohn, made comments on Wednesday that signaled a willingness to cut interest rates next month.

Expectations for a cut in U.S. interest rates lift assets in riskier emerging markets, drawing capital in search of higher returns.

Petrobras Energia Participaciones PCH.BA, the Argentine arm of Brazilian state oil giant Petrobras, gained 4.44 percent to 3.53 pesos per share. The issue is weighted 6.55 percent of the MerVal.

Bond prices in Argentina <AR/BONOS> jumped by 2.5 percent on average, with the dollar-denominated Par rising 2.8 percent and the Disc bond in dollars ending up 2.5 percent.

In the foreign exchange market, the peso firmed slightly as grains exporters sold dollars.

In informal trade between foreign exchange houses, as measured by Reuters, the peso strengthened 0.08 percent to 3.1650/3.1675 per U.S. dollar ARSB=. In formal interbank trade, where the central bank intervenes, the peso firmed by the same margin to to 3.1475/3.1500 per dollar ARS=RASL. (Reporting by Jorge Otaola and Walter Bianchi; translated by Helen Popper; editing by Gary Crosse)