March 18, 2008 / 8:54 PM / 12 years ago

Argentine stocks, bonds rebound after Fed rate cut

BUENOS AIRES, March 18 (Reuters) - Argentine stocks climbed on Tuesday in line with the rise of external markets following the U.S. Federal Reserve’s interest rate cut.

The benchmark MerVal index .MERV closed up 1.2 percent to 2,081.67 points.

“The interest rate cut fueled the MerVal’s rise,” said Ruben Pascuali, a broker at Mayoral brokerage.

The MerVal and U.S. stocks jumped after the Fed slashed a key U.S. interest rate by three-quarters of a percentage point, a substantial cut but smaller than many in financial markets had expected.

The Fed’s action, part of an effort to hold off a deep recession and financial meltdown, takes the bellwether federal funds rate target down to 2.25 percent, the lowest since February 2005.

In Argentina, the session’s top percentage winners included energy group Transportadora de Gas del Sur TGS2.BA, which was up 4.64 percent to 2.93 pesos per share, and Petrobras Energia Participaciones PCH.BA, a branch of the Brazil’s Petrobras APBR.BA, which surged 4.35 percent to 3.45 pesos.

On the broad market, volume was a modest $27.5 million. Of the active issues, 48 advanced, 17 declined and 13 ended unchanged.

Meanwhile, government debt prices <AR/BONOS> rose 1.7 percent on average, led the dollar-denominated Discount bond, with a jump of 3.1 percent, and the Par bond, also denominated in dollars, gaining 2.1 percent in over-the-counter trade.

With the dollar in free-fall against the euro, the peso EURCC=RASL hit a historic low against the European currency in the informal market, ending at 4.96/5.06 pesos per euro.

Against the dollar, the peso firmed 0.08 percent to 3.1450/3.1475 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= ended unchanged at 3.1825/3.1850 per dollar. (Reporting by Walter Bianchi and Jorge Otaola; Writing by Gaspard Sebag; Editing by Neil Stempleman)

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