January 15, 2009 / 9:00 PM / 11 years ago

Argentine stocks rise on U.S. bank rescue hopes

BUENOS AIRES, Jan 15 (Reuters) - Argentine stocks made a U-turn at the end of the session on Thursday, spurred higher by a Wall Street rebound after news reports that the U.S. government may provide fresh capital to crisis-hit banks.

The Argentine peso currency closed slightly weaker, and sovereign bonds traded on the over-the-counter market in Buenos Aires gained on persistent talk of a possible deal between the government and holders of defaulted Argentine bonds.

The benchmark MerVal index .MERV gained 1.16 percent to 1,100.26 points after falling by as much as 2.68 percent earlier in the day. On the broad market, volume was a healthy $25 million. Of active issues 24 declined, 29 advanced and 15 were unchanged.

“Speculation about more aid for U.S. banks allowed a swift turnaround on Wall Street and that let the MerVal change direction,” said Francisco Marra, trader with Bull Markets Brokers.

Market bellwether, steel pipe maker Tenaris TENA.BA that is weighted as more than a third of the MerVal, glided up 2.49 percent to 37.1 pesos per share.

On the over-the-counter bond market, gains were led by 2038 dollar-denominated Par bonds ARPARD=RASL, which jumped 5.4 percent to an ask price of 21.65.

In formal exchange between banks the peso currency inched down 0.07 percent to 3.4525/3.4550 per dollar ARS=RASL. In informal trade between foreign exchange houses, as measured by Reuters, the peso weakened by the same percentage to end at 3.5325/3.5350 ARSB=. (Reporting by Jorge Otaola and Walter Bianchi; Writing by Fiona Ortiz, Editing by Chizu Nomiyama)

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