BUENOS AIRES, Sept 8 (Reuters) - Argentine stocks fell on Monday to their lowest point in 23 months as profit-taking wiped out earlier gains, while bonds rose on broader optimism about emerging market assets.
The benchmark MerVal .MERV index closed down 0.62 percent at 1,668.21 points after rising by as much as 1.81 percent due to the U.S. government's decision to rescue mortgage lenders Fannie Mae and Freddie Mac.
"Even with a bailout like that announced ... the uncertainty about the banks remains and because of that we saw a heavy bout of profit-taking," said Marcelo Paccione, an analyst at the ConsulCapital consulting firm.
Banking stocks were among the MerVal's losers, but the biggest loss was registered by Brazil's state oil firm Petrobras APBR.BA, down 5.29 percent to 66.2 pesos per share.
Trade volume on the broad market was a slack $27.4 million. Of active shares, 61 advanced, 45 declined, and 17 were unchanged.
On the local debt market, Argentine bonds <AR/BONOS> closed up on average by 1.1 percent in over-the-counter trade, lifted by global optimism following the U.S. government's decision to bail out the troubled mortgage finance companies.
Among the day's biggest gainers was the Boden 14 in dollars ARBODEN14D=RASL, which rallied by as much as 5.5 percent.
Argentine debt spreads over U.S. Treasuries, considered a key measure of risk aversion, narrowed by 7 basis points to 715 basis points at 2035 GMT, according to the benchmark JPMorgan EMBI+ index 11EMJ .JPEMBIPLUS.
The peso ended weaker in interbank trade ARS=RASL, falling 0.33 percent to 3.0475/3.0500 per dollar -- its weakest level in three months -- as the central bank and private banks snapped up greenbacks, traders said.
At the same time, the peso held stable at 3.0700/3.0725 ARSB= in informal trade between foreign exchange houses, as measured by Reuters. (Reporting by Jorge Otaola; Writing by Helen Popper; Editing by Jonathan Oatis)