BUENOS AIRES, Oct 1 (Reuters) - Argentine stocks rallied on Monday, lifted by gains in regional markets fed by increased investor interest in riskier emerging market assets.
The benchmark MerVal index .MERV rose 1.98 percent to close at 2,231.43 points. The MerVal on Monday included four additional companies as part of a quarterly change in the composition of the blue-chip index.
In Sao Paulo, Brazilian stocks soared 3.1 percent to reach an all-time high of more than 62,000 points. The Dow Jones industrial average also hit a record high, rising 1.38 percent as investors bet that the worst of the credit crisis had passed.
Since the Fed cut interest rates in September, emerging markets, particularly Brazil, have been major recipients of investment flows.
"As the dollar continues to fall against other currencies, stocks are dominating investors' attention and preferences. As a result, certain global markets hit record highs (today)," said Juan Diedrich, an analyst with Capital Markets Argentina brokerage.
The MerVal's biggest winners included steel pipe giant Tenaris (TENA.BA), which rose 4.1 percent to 86.45 pesos per share, and Acindar ACI.BA, which gained 5.02 percent to close at 4.81 pesos per share.
Volume on Argentina's broad market was a heavy 117.6 million pesos ($37 million). Of active issues, 55 advanced, 22 declined and 10 were unchanged.
Bond prices on the local market also climbed 0.5 percent on average, but trade was cautious as investors continued to watch for new signs about U.S. economic health.
Dollar-denominated Discount bonds led gains with a rise of 1.2 percent, while Dollar-denominated Bonar 2013 paper followed with a a gain of 0.6 percent <AR/BONOS>.
On the foreign exchange market, the peso closed with mixed results against the dollar as grain exporters capitalized on high foreign prices.
The peso ARSB= gained 0.24 percent to close at 3.1850/3.1875 per U.S. dollar in trade between foreign exchange houses, as measured by Reuters.
In interbank trade, where the central bank intervenes almost daily, the peso closed steady at 3.1475/3.1500 pesos per dollar ARS=RASL. (Additional reporting by Hernan Nessi)