BUENOS AIRES, July 15 (Reuters) - Argentine stocks tumbled on Tuesday amid investor worries over a four-month dispute between the government and farmers over a hike in soy export taxes and concerns about the health of U.S. banks.
The benchmark MerVal index .MERV fell 2.24 percent to close at 1,878.83 points after dipping as much as 2.75 percent and briefly touching an 11-month low.
Steelmaker Tenaris TENA.BA TS.N — the world’s leading producer of seamless steel tubes for the energy industry — led the session’s losers, sliding nearly 5 percent to 104.3 pesos.
“The domestic tensions and the continued volatility on international markets pushed the market lower and reduced volume,” said Jorge Alberti, an analyst at Elaccionista.com.
On Tuesday, Argentine farmers and supporters of President Cristina Fernandez held massive rival rallies trying to influence a close Senate vote on a controversial soy export tax that sparked a political crisis.
Falling global crude oil prices also pushed Tenaris lower, Alberti said. Oil slid more than $6 on Tuesday, after losing as much as $9.26 a barrel — the largest drop in dollar terms in 17 years — on worries about the economic health of the United States.
In New York, the Dow Jones industrials and the S&P 500 fell on renewed worries about the success of government efforts to stabilize the financial sector badly hit by the global credit crisis.
Trading volume on the MerVal was a slack $16.5 million. Among active issues, 77 fell, 23 rose and 12 were unchanged.
Argentine bonds traded on the local market deepened their losses on Tuesday, pushed down by the farm conflict.
Bonds fell 0.9 percent on average in over-the-counter trade and have shed between 7 percent to 12 percent in the last two weeks.
“Many investors are looking for liquidity and given the uncertainty (over the farm dispute),” one trader said.
On the foreign exchange market, the peso closed steady in light trade as investors stayed on the sidelines eyeing the Senate vote on Wednesday.
In formal interbank trade, where the central bank regularly intervenes, the peso ARS=RASL closed flat at 3.0225/3.025 per dollar.
In informal trade between foreign-exchange houses, as measured by Reuters, the peso rose 0.33 percent to 3.0625/3.065 per dollar ARSB=. (Reporting by Walter Bianchi and Jorge Otaola; Writing by Kevin Gray; editing by Gary Crosse)