July 7, 2008 / 10:00 PM / 12 years ago

Argentine stocks fall on worry about banks, politics

BUENOS AIRES, July 7 (Reuters) - Argentine stocks sank on Monday, pressured by losses in banking and service-sector shares amid persistent political jitters and Wall Street, traders said.

The benchmark MerVal index .MERV fell 2.54 percent to close at 1,955.33 points. Last week, the MerVal fell more than 4 percent.

Over the weekend, the lower house of Congress ratified a tax hike on soy exports. The measure first imposed by the government in March sparked a series of debilitating farm protests, which hurt local financial markets.

“The ruling party’s victory in the Chamber of Deputies continues to discourage investors because the farm conflict is not over,” said Marcelo Paccione, an analyst at ConsultCapital.

Trading volume was a healthy $30.3 million, and of active issues, 14 rose, 59 fell and 13 were unchanged.

The session’s losses were led by BBVA Banco Frances FRA.BA, which shed 5.4 percent to end at 5.26 pesos a share.


Argentine bonds traded on the local market rose slightly on selective purchases by state-run banks and other investors, after a steep fall in prices in recent weeks.

The biggest gains were seen in the peso-denominated Par bond, which jumped 1.9 percent, and the Bonar 2017, which rose 1.8 percent.

On the foreign-exchange market, the peso closed stable to firmer.

In formal interbank trade, where the central bank regularly intervenes, the peso ARS=RASL closed 0.33 percent stronger at 3.0150/3.0175 per dollar.

In informal trade between foreign-exchange houses, as measured by Reuters, the peso ended unchanged at 3.0500/3.0525 per dollar ARSB=. (Reporting by Walter Bianchi; Writing by Hilary Burke; Editing by Jan Paschal)

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