May 13, 2008 / 9:31 PM / 12 years ago

Argentine stocks fall on banking shares; peso gains

BUENOS AIRES, May 13 (Reuters) - Argentine stocks slipped on Tuesday, pushed lower by banking shares as investors fretted over political uncertainty fueled by a farmers’ strike.

The MerVal index .MERV of leading stocks shed 0.87 percent to close at 2,106.69 points in healthy trade.

The standoff between the government and farmers opposed to an export tax rise has fanned market jitters, which continued on Tuesday, said Horacio Corneille, a trader at the brokerage that bears his name.

“The overall climate of the strike is affecting the MerVal,” he said.

Volume on the broad market was $39.6 million and of active issues, 39 advanced, 53 declined and 14 were unchanged.

Leading Argentine banking conglomerate Grupo Financiero Galicia GFG.BA slid 4.73 precent to 1.81 pesos.

The farming protests, which began on Thursday, continued to feed the cautious mood in the debt market, with locally traded bonds <AR/BONOS> falling by 0.6 percent.

Heavy intervention by the central bank helped the peso strengthen after slipping in recent days, traders said.

“The central bank calmed the market, which operated at high volumes,” said Fernando Izzo, an analyst at ABC Mercado de Cambios.

In informal trade between foreign exchange houses, as measured by Reuters, the peso gained 0.08 percent to 3.27/3.2725 per dollar <ARSB=.

In formal interbank trade — where the central bank intervenes directly — it strengthened 0.39 percent to 3.1625/3.165 per dollar ARS=RASL.

Reporting by Walter Bianchi; Writing by Kevin Gray

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