January 20, 2009 / 8:23 PM / 11 years ago

Argentine stocks plunge on global woes, bonds down

BUENOS AIRES, Jan 20 (Reuters) - Argentine stocks slumped on Tuesday to their lowest close in more than three weeks, as global economic woes and troubled banks worldwide took their toll on the market. Bonds and the peso also lost ground.

The benchmark MerVal index .MERV dove 5.75 percent to 1,044.64, the lowest close since Dec. 23. On the broad market, volume was meager at $12 million. Of active issues six advanced, 45 declined, and 10 were unchanged.

Grupo Financiero Galicia GFG.BA, Argentina’s biggest financial group and holder of its largest bank, slid 6 percent to 0.71 pesos per share. The group is weighted as 7 percent of the MerVal.

“Watching the heavy deterioration in (foreign) banking shares brings a high level of uncertainty to our bourse. Sales were generalized because people wanted liquidity,” said Juan Molinari, trader with Molinari brokerage.

Argentine government bonds traded over the counter in Buenos Aires fell by an average 0.6 percent, led by the peso-denominated 2038 Par bond, which slumped 1.5 percent to an ask price of 20 ARPARP=RASL.

Traders said that sales of bonds were triggered by news that the government would soon issue new debt to soak up bank loans known as “Guaranteed Loans” that date from the 2001-2002 economic crisis and that are soon due to mature.

The peso weakened against the dollar, as did most world currencies on Tuesday, but also because the central bank bought excess dollars from export companies.

In formal exchange between banks the peso slipped 0.14 percent to 3.4600/3.4625 per dollar ARS=RASL. In informal trade between foreign exchange houses, as measured by Reuters, the peso nudged down 0.07 percent to 3.5100/3.5150 ARSB=. (Reporting by Jorge Otaola; Writing by Fiona Ortiz; Editing by James Dalgleish)

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