January 23, 2008 / 4:16 PM / 12 years ago

Argentine stocks, bonds down on global downturn

(Updates, adds bonds)

BUENOS AIRES, Jan 23 (Reuters) - Argentine stocks and bonds traded lower in early afternoon trade on Wednesday as investors ditched riskier emerging market assets amid global fears of a recession in the United States.

Mirroring other stock markets, the MerVal .MERV index of 42 leading shares traded down 2.47 percent at 1,895.61 points at 2:03 p.m. (1603 GMT). Earlier in the session, it fell by as much as 3.4 percent.

Since the start of the year, it has clocked up a loss of 12.04 percent.

“The conditions will remain volatile and jumpy in outside markets. It’s going to take time to get out of this situation,” said Leopoldo Olivari, a trader at the Bacque brokerage in Buenos Aires.

“There’s no doubt traders have felt the effect of the losses on the value of their portfolios, so the recovery will be slow,” he added.

The U.S. Federal Reserve made a surprise cut to a key interest rate on Tuesday of 75 basis points in a bid to calm international market jitters.

On the bond market, Argentine sovereign debt <AR/BONOS> was trading down by an average of 1.4 percent in afternoon trade. The peso ARSB= had weakened slightly against the dollar.

Argentine Cabinet Chief Alberto Fernandez told local radio the country “was in a privileged position in the world” to ride out current economic climate, referring to the center-left government’s policy to maintain a fiscal surplus of 3.15 percent of GDP and accumulate international reserves. (Reporting by Helen Popper; Editing by Tom Hals)

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