January 21, 2008 / 9:09 PM / 12 years ago

Argentine stocks slide on U.S. economy concerns

(Updates with markets closed)

BUENOS AIRES, Jan 21 (Reuters) - Argentine stocks plummeted on Monday, making their biggest one-day drop since February 2007 and falling with global markets hit by worries the U.S. economy was heading into recession, traders said.

The MerVal index .MERV of 42 leading companies closed 6.27 percent lower at 1,876.87 points in light trading.

“We were part of the domino effect,” said Hernan Labrone, an analyst at Fenix Compania Fianciera. “On a day when no market was spared, the Argentine market, although lacking volume, fell in tandem with external markets.”

The session’s losses were led by stocks linked to the oil industry.

Brazil’s Petrobras APBRA.BA shed 8.67 percent to close at 137 pesos while Tenaris TENA.BA, which makes steel pipes for the oil industry, retreated 7.14 percent to 54 pesos.

On Argentina’s broad market, volume was a modest $16.4 million, while 56 issues declined, 5 were unchanged and one advanced.

“The (share) drops are the result of a global panic. Facing a climate of uncertainty, investors look for liquidity”, said Francisco Marra, a trader at Bull Market Brokers.

The Argentine bonds market remained virtually inactive on Monday due to the Martin Luther King holiday in the United States.

The peso ended weaker. In informal trade between foreign exchange houses, as measured by Reuters, the currency ended down 0.16 percent at 3.1825/3.185 per dollar ARSB=.

In formal interbank trade, the peso weakened 0.24 percent to close at 3.1575/3.16 ARS=RASL. (Reporting by Jorge Otaola; Writing by Gaspard Sebag; Editing by John Picinich)

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