May 20, 2008 / 9:10 PM / 12 years ago

Argentine stocks lifted by crude prices; bonds firm

BUENOS AIRES, May 20 (Reuters) - Argentine stocks got a lift from record oil prices on Tuesday, while bond prices rose after farmers agreed to end a two-week protest and negotiate with the government to end a conflict over taxes.

The benchmark MerVal index .MERV ended 1.1 percent higher at 2,218.29 points. Volume on the broad market was moderate at $33.5 million. Of active issues, 49 rose, 77 fell and 17 were unchanged.

Buenos Aires-listed share of Brazilian state oil firm Petrobras APBR.BA gained 3.24 percent to 121 pesos per share, and heavyweight Tenaris TENA.BA, which makes steel tubes for the oil industry, rose 0.55 percent to 99.15 pesos.

“Oil issues were the most sought after, taking into account record prices per barrel,” said Marcelo Paccione, analyst with ConsultCapital. Oil prices rose to a record high near $130 per barrel.

While oil prices and inflation concerns caused stocks in other markets to tumble, companies are heavily waited on the MerVal.

Argentine government debt rose an average 0.3 percent in local trade after farmers agreed to end a protest over a new tax on soy exports. Farmers in Argentina — one of the world’s agricultural powerhouses — have gone on strike twice since March over the tax, freezing trade on grain markets.

Both the dollar-denominated Boden 2014 and the Par bond in pesos rose 0.7 percent.

In the foreign exchange market, the peso closed 0.08 percent stronger at 3.2100/3.2125 per dollar ARSB= in informal trade between foreign exchange houses, as measured by Reuters.

In formal interbank trade the peso firmed 0.32 percent to 3.1375/3.1400 per dollar ARS=RASL. Traders said the Central Bank sold greenbacks to bolster the local currency as investors sought safety in dollars due to the political conflict over the soy tax. (Reporting by Walter Bianchi, writing by Fiona Ortiz; Editing by Leslie Adler)

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