June 9, 2008 / 9:06 PM / in 12 years

Argentine stocks fall ahead of president's speech

BUENOS AIRES, June 9 (Reuters) - Argentine stocks closed lower on Monday for the second straight session, mirroring losses in other markets in Latin America, while the peso firmed and bond prices rose slightly.

The benchmark MerVal stocks index .MERV fell 0.8 percent to end at 2,162.12 points. Brazilian .BVSP and Mexican .MXX markets also ended lower.

On Argentina’s broad market, volume was thin at $17.3 million as investors awaited progress after farmers lifted their third protest in three months, and ahead of a speech by President Cristina Fernandez, scheduled for Monday evening.

“The MerVal accompanied the trend seen elsewhere in the region but with very little trade as investors awaited the president’s speech,” said Horacio Corneille, director of a brokerage bearing his last name.

“They want to see what tone she uses to make any announcement, whether it is confrontational or conciliatory,” he added.

The MerVal’s losses were led by media holding Grupo Clarin CLA.BA, which shed 5.5 percent to end at 17.3 pesos a share.

Of active issues on the broad market, 22 advanced, 62 declined and 13 were unchanged.


Government debt traded locally rose an average 0.3 percent on purchases by state-run banks, traders said. The biggest gainer was the dollar-denominated Discount bond, which rose 1.5 percent.

Argentina will unveil its new inflation methodology on Tuesday with May’s reading, but analysts have said they expect the government to continue under-reporting price rises.

About 40 percent of Argentine debt is adjusted for inflation, and widespread suspicion of data manipulation has hurt those bonds.

The peso currency firmed as the central bank resumed the sale of dollars on the market, traders said. In formal interbank trade, the peso strengthened 0.16 percent to close at 3.0625/3.0650 per dollar ARS=RASL.

In informal trade between foreign exchange houses, as measured by Reuters, the peso also ended 0.16 percent firmer at 3.1475/3.1500 per dollar ARSB=.

The central bank has been selling its foreign reserves to sustain the peso in recent weeks, after uncertainty over the farm protests sent investors scrambling for greenbacks. (Reporting by Walter Bianchi and Jorge Otaola; Writing by Hilary Burke)

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