November 3, 2008 / 4:10 PM / 12 years ago

UPDATE 1-Argentine bonds rise on gov't debt buyback talk

(Updates with stock market)

BUENOS AIRES, Nov 3 (Reuters) - Argentine bonds rose on Monday after two Argentine newspapers reported the government is weighing a plan to buy back locally traded bonds whose prices have slumped in recent weeks.

A spokesman for the Economy Ministry refused to comment on the reports in El Cronista and Ambito Financiero newspapers, which cited anonymous government sources.

Argentine debt prices suffered steep losses last month because of the global financial crisis and a surprise announcement by the government that it plans to take over the country’s private pension funds.

Bonds traded on the local market rose 5.6 percent on average, with dollar-denominated Disc paper ARDISCP=RASL rising 10.8 percent.

Argentine global bond yield spreads over U.S. Treasuries narrowed 271 basis points to 1,515 basis points, according to JP Morgan’s benchmark Emerging Markets Bond Index Plus (EMB+) 11EMJ.

Argentine stocks, meanwhile, jumped more than 6 percent in light trade, buoyed by early gains on Brazil’s Bovespa index .BVSP. The Brazilian stock market frequently influences movements on the Argentine stock exchange.

Argentina’s MerVal index .MERV of leading stocks rose 6.32 percent to 1074.72 points at 1528 GMT, led by leading Argentine banking conglomerate Grupo Financiero Galicia GFG.BA, which gained 13 percent to 0.78 pesos.

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