January 23, 2008 / 9:33 PM / in 12 years

Argentine stocks slide on global market turbulence

(Updates with markets close)

BUENOS AIRES, Jan 23 (Reuters) - Argentine stocks slumped on Wednesday as investors sold off emerging markets assets, worried the U.S. economy will not be able to avoid a recession despite an interest rate cut by the U.S. Federal Reserve.

The MerVal index .MERV of 42 leading companies closed 2.69 percent lower at 1.891,25 points, accumulating a loss of 12.11 percent so far this year.

“The MerVal continues to be dragged down by the market crises in the United States,” said Marcelo Paccione, an analyst at ConsulCapital.

On the broad market, volume was a modest $26.6 million, while 68 issues retreated, four advanced and five remained unchanged.

“Conditions will continue to be ruled by volatility and nervousness in the external markets. It will take time to reverse this situation,” said Leopoldo Olivari, a broker at Bacque.

Argentine bonds fell, ending 1.1 percent lower on average, as investors sought to distance themselves temporarily from the market.

The peso weakened 0.08 percent. In informal trade between foreign exchange houses, as measured by Reuters, the currency ended at 3.185/3.1875 per dollar ARSB=.

In formal interbank trade, the peso closed stable at 3.155/3.1575 ARS=RASL. (Reporting by Jorge Otaola; Writing by Gaspard Sebag; Editing by Dan Grebler)

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