November 20, 2008 / 9:26 PM / 12 years ago

Argentine stocks slide as Wall Street nosedives

BUENOS AIRES, Nov 20 (Reuters) - Argentine stocks and bonds tumbled on Thursday, weighed down by a sharp sell-off on Wall Street as investors fretted over the weakening U.S. economy.

The MerVal benchmark index .MERV slid 6.58 percent to 864.4, falling for the fourth straight session and extending its losses to 15.49 percent this week.

“A sharp drop in the MerVal was inevitable with the Dow Jones falling,” said Juan Diedrichs of Capital Markets Argentina.

U.S. stocks .DJI fell sharply as the darkening global economic outlook prompted fearful investors to sell shares.

Energy shares on Wall Street fell along with oil prices and worries about the prospects for a bailout of U.S. automakers also drove shares lower.

The fall in crude CLc1 prices to a 3-1/2-year low of well below $50 a barrel hit energy-related shares in Buenos Aires, with locally listed shares of Petrobras APBR.BA, Brazil’s state-run energy company, falling 15.75 percent to 27.8 pesos.

Tenaris TENA.BA, the world’s leading producer of seamless steel tubes for the energy industry, slumped 10.63 percent to close at 32.8 pesos.

On the broad market, volume was slack at $16.7 million. Of active issues, 3 advanced, 54 declined and 9 were unchanged.

Argentine debt was also hit by the fall on Wall Street as investors sold off riskier emerging market assets.

Locally traded government bonds shed 2.1 percent on average, erasing gains for the month. The dollar-denominated Bonar 2014 ARBONAR14=RASL retreated 5.7 percent.

On the foreign exchange market, the peso closed slightly lower, falling 0.08 percent to 3.275/3.33 per dollar ARS=RASL in formal interbank trade. The currency weakened 0.08 percent to 3.375/3.38 per dollar ARSB= in informal trade between foreign exchange houses, as measured by Reuters. (Reporting by Walter Bianchi; Writing by Kevin Gray; Editing by James Dalgleish)

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