May 22, 2008 / 8:40 PM / 12 years ago

Argentine stocks rise on rate hike talk, bonds off

BUENOS AIRES, May 22 (Reuters) - Argentine stocks rose for a sixth consecutive session on Thursday on speculation that the government may allow utility companies to raise rates, but bond prices fell on profit taking after a few sessions of gains.

The benchmark MerVal index .MERV added 1.23 percent to close at 2,248.63 points. Volume was moderate at $31 million on the broad market, where 44 issues advanced, 21 declined and 18 ended unchanged.

“The new impulse in the MerVal is driven by utilities due to investors’ perceptions of a rate hike for services,” said Claudio Szlain, an analyst with brokerage Marlon Recursos Financieros in Buenos Aires.

Metrogas MET.BA, which distributes natural gas, soared 10 percent to 1.42 pesos per share. Energy company Pampa Holding PAM.BA jumped 6.3 percent to 2.02 pesos per share in very heavy volume.

The government has not reacted to market rumors about utility rates. Utility prices have been officially frozen, with few exceptions, since a 2001-2002 economic recession and political crisis.

Prices for government bonds traded locally fell on Thursday as investors cashed in gains from recent days. The Par bond in dollars was off 3.5 percent.

Bond prices had fallen during a conflict between farmers and the government over soy export taxes, last week, but they recovered this week enough to spur profit taking.

The peso currency weakened by 0.31 percent to 3.2200/3.2225 per U.S. dollar ARSB= in informal trade between foreign exchange houses, as measured by Reuters. In formal interbank trade, the peso slipped slightly, by 0.08 percent, to 3.1350/3.1375 per dollar ARS=RASL. (Reporting by Walter Bianchi, writing by Fiona Ortiz; Editing by Jonathan Oatis)

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