December 16, 2008 / 9:41 PM / 12 years ago

Argentine stocks extend gains on U.S. rate cut

BUENOS AIRES, Dec 16 (Reuters) - Argentine stocks extended their gains to close higher for a tenth straight session on Tuesday, buoyed by the U.S. Federal Reserve’s decision to cut its overnight interest rates to a record low.

The benchmark MerVal index .MERV rose 2.53 percent to close at 1,143.33 points. On the broad market volume was lightat $16.1 million and of active issues 41 advanced, 13 declined and 15 were unchanged.

The Fed lowered its target for the benchmark federal funds rate to a range of zero to 0.25 percent and said it would use “all available tools” to dispel a year-long recession.

The surprise cut in the federal funds rate pushed it to the lowest level on records dating to July 1954.

“The rate cut was more aggressive than expected and that helped the MerVal rally with Tenaris and Petrobras leading the way,” said Claudio Szlaien, an analyst at Marlon Recursos Financieros.

Index heavyweight Tenaris TENA.BA, the world’s leading producer of seamless steel tubes for the energy industry, rose 5.59 percent to 37.8 pesos.

Buenos Aires-listed shares of Brazilian oil company Petrobras APBR.BA climbed 1.7 percent to 43.3 pesos per share.

On the foreign exchange market, the peso gained in a market heavily regulated by the central bank and helped by the fall of the U.S. dollar after the Fed interest rate cut, traders said.

In formal trade between banks the peso strengthened 0.66 percent to 3.40/3.4025 per dollar ARS=RASL. In trade between foreign exchange houses, as measured by Reuters, the peso closed virtually unchanged at 3.47/3.4725 per dollar ARSB=.

Reporting by Jorge Otaola and Walter Bianchi, Writing by Kevin Gray

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