November 5, 2008 / 9:03 PM / 12 years ago

Argentina stocks gain, bonds and peso weaker

BUENOS AIRES, Nov 5 (Reuters) - Argentine stocks ended up for a seventh straight session on Wednesday due to late buying by state-run investment funds, while bonds fell on profit-taking after a run of four gains.

The benchmark MerVal stocks index .MERV closed up 1.12 percent at 1,135.79 points, reversing earlier losses and bucking the downward trend of other global stock markets. The index has climbed 35.2 percent in the last seven sessions.

“Last-minute buying by funds lifted the MerVal, with buying focused on telecommunications and banking stocks,” said Marcelo Paccione, an analyst at the ConsultCapital consulting firm.

Traders said the investment fund Nacion Bursatil, which is run by state bank Banco Nacion, was the biggest player in Wednesday’s buying.

Among the biggest gainers were Telecom Argentina TEC2.BA, which rose 7.14 percent to 5.4 pesos per share.

Trade volume on the broad market was $23.4 million, and of active shares 26 advanced, 27 retreated and 15 were unchanged.

Locally traded Argentine bonds ended with an average loss of 2.4 percent, after opening up 0.8 percent. The local debt market has climbed by an average of 13 percent in the last four sessions due to bargain-hunting after October’s sell-off.

Leading the losers was dollar-denominated Par paper ARPARD=RASL, which fell 3.3 percent in over-the-counter trade, according to the ask price.

Local Argentine debt prices fell 60 percent on average last month because of the global financial crisis and a government plan to take over private pension funds.


On the foreign exchange market, the peso closed down due to a surge of demand for safe-haven dollars from companies after the greenback weakened against the peso a day earlier amid increased pressure from the authorities, traders said.

Under rules announced by the Central Bank on Monday, banks must hold onto bonds and stocks for at least three days. The measure aims to curb short-term buying and selling that causes abrupt movements in the markets and to stem the dollar’s rise.

Authorities also said this week they were investigating suspected tax evasion in the foreign exchange markets.

After Tuesday’s unusually sharp one-day rise, the peso closed down 0.23 percent on Wednesday at 3.305/3.3075 per dollar ARS=RASL in formal trade between banks where the Central Bank routinely intervenes.

Traders said the bank had bought dollars to mark its presence in the market, traders said.

In informal trade between foreign exchange houses, as measured by Reuters, the peso weakened 0.44 percent to 3.39/3.395 per dollar ARSB=.

Argentina’s financial markets will remain closed on Thursday for a banking industry holiday. (Reporting by Jorge Otaola and Walter Bianchi; Writing by Helen Popper; Editing by Chizu Nomiyama )

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