March 13, 2008 / 8:39 PM / 12 years ago

Argentine stocks up, peso hits historic low vs euro

BUENOS AIRES, March 13 (Reuters) - Argentine stocks rose on Thursday mirroring Wall Street’s rebound as U.S. financial shares recovered, while the peso hit a record low against the euro due to the weakness of the U.S. dollar.

The benchmark MerVal index .MERV closed up 0.73 percent to 2,149.91 points.

The MerVal tracked Wall Street’s recovery as financial shares erased earlier steep losses after a major credit rating agency said the end to subprime-related write-downs is in sight.

“The MerVal was able to revert the (bearish) trend thanks to Tenaris,” said Juan Diedrich, an analyst at Capital Markets Argentina brokerage.

The session’s gainers were led by index heavyweight Tenaris TENA.BA, a top global producer of steel tubes for the natural gas and oil industry, which rose 2.49 percent to 80.2 pesos per share.

On the broad market, volume was a healthy $41.9 million. Of the active issues, 30 advanced, 37 declined, and 14 ended unchanged.

Meanwhile, government debt prices <AR/BONOS> fell 0.7 percent on average. Prices were mixed with the peso-denominated Par bond dropping 2.9 percent in over-the-counter trade, while the Boden 2014 denominated in dollars rose 0.6 percent.


The Argentine government’s frequent intervention to sell the Argentine peso and buy U.S. dollars has kept the currency weak to boost exports, even while other major regional currencies have appreciated sharply.

The flip-side of this maneuver is that the peso, effectively pegged to the dollar at around 3 pesos per dollar for the last four years, is dependent on the greenback’s fluctuations against other currencies.

With the dollar weakening against the euro, the peso hit a historic low against that currency in the informal market.

In informal trade between foreign exchange houses, traders said the peso EURCC=RASL weakened 0.6 percent to 4.9/5.0 pesos per euro. In formal interbank trade, the Argentine currency EURB=RASL slipped by the same percentage to 4.93/4.97 pesos per euro.

Against the dollar, the peso closed up 0.08 percent to 3.1475/3.1500 ARS=RASL in formal interbank trade, where the central bank normally intervenes. In informal trade between foreign exchange houses, as measured by Reuters, the peso ARSB= weakened 0.24 percent to 3.1775/3.1800 per dollar.

Reporting by Walter Bianchi and Jorge Otaola; Writing by Gaspard Sebag; Editing by Diane Craft

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