January 5, 2010 / 9:19 PM / in 11 years

Argentine stocks extend record close; bonds up

BUENOS AIRES, Jan 5 (Reuters) - Argentine stocks closed at a record high for the second straight day on Tuesday, led by banking shares, while bond prices rose before a pending sovereign bond swap.

The benchmark stock index MerVal .MERV rose 0.72 percent to close at 2,401.75 points.

“Investor interest over bonds on the proximity of the debt swap benefited banking issues,” said Marcelo Paccione, an analyst for ConsulCapital.

Argentina expects to launch in late January a swap to mop up $20 billion in defaulted bonds, as part of an effort to clean up problems left over from its massive sovereign default eight years ago. For details see [ID:nN04218547].

Argentine banks are among the biggest holders of government bonds and the pending offer has pushed bond prices higher in recent months.

On Monday, Argentine stocks closed at a record high, both on the debt deal and on the global commodity prices rally, which boosted oil sector stocks.

Among the biggest gainers on Tuesday were leading Argentine banking conglomerate Grupo Financiero Galicia GFG.BA, up 2.75 percent to 2.24 pesos per share, BBVA Banco Frances FRA.BA up 3.94 percent to 8.45 pesos and large retail bank Banco Macro (BMA.BA) up 0.49 percent to 11.20 pesos.

Bond prices rose 0.30 percent on average, led by the peso-denominated ‘Par’ bond ARPARP=RASL which was up 1.4 percent to 37.20 according to the ask price.

Traders said stocks were also boosted by higher global oil prices as cold weather in the United States and Europe increased demand for heating oil and boosted oil-sector companies.

Tenaris TENA.BA, a global leader in steel products for the oil industry, rose 2.04 percent to 85.20 pesos. (Reporting by Jorge Otaola; Writing by Luis Andres Henao; Editing by Kenneth Barry)

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