Argentina stocks boosted by hike in power rates
BUENOS AIRES, July 30 (Reuters) - Argentine stocks advanced for a fourth consecutive session on Wednesday, led by gains in electrical power utilities after the government raised residential rates in and around the capital.
The MerVal index .MERV closed 1.2 percent higher at 1,949.84 points in moderate volume of $40 million. Of active issues, 55 rose, 28 declined and 13 were unchanged.
Volume leader Pampa Holding (PAM.BA: Cotización), an energy company that is weighted as 11 percent of the MerVal, rose 1.7 percent to close at 1.81 pesos per share, a seven-week high close.
"Investment flow into the electricity sector is continuing because of the rates," said Marcelo Paccione, analyst at ConsulCapital in Buenos Aires. He said stocks were also helped by the good mood on Wall Street after an unexpectedly strong report on the U.S. job market.
Argentina raised residential power rates in and around Buenos Aires for the first time in seven years, targeting households that consume the most power to reduce state spending on energy subsidies. For details, see [ID:nN30472050].
The peso slipped 0.08 percent to 3.0250/3.0275 per dollar in formal interbank trade ARS=RASL. However, the local currency gained 0.25 percent to 3.0575/3.0600 ARSB= in informal trade between foreign exchange houses, as measured by Reuters.
The peso was impervious to dollar gains against major world currencies, due to the customary Central Bank intervention in the foreign exchange market.
"The peso is tied to very domestic issues. It only moves on local politics and economics since the Central Bank has a strong influence," a trader said. (Reporting by Jorge Otaola, writing by Fiona Ortiz; Editing by Jonathan Oatis)
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