June 24, 2008 / 9:56 PM / 12 years ago

Argentine stocks dip, eyeing Fed; peso gains

BUENOS AIRES, June 23 (Reuters) - Argentine stocks fell on Tuesday, shedding recent gains as investors awaited signals from the U.S. Federal Reserve on whether it will soon begin to raise interest rates.

The benchmark MerVal stock index .MERV fell 1.14 percent to 2,067.59 points, ending four consecutive sessions of gains that saw the index climb 2.73 percent.

Volume was a slack $17.5 million. Of active issues 20 rose, 45 fell and 10 were unchanged.

“The lack of volume showed investors are in a holding pattern,” said Antonio Cejuela, an analyst at the Fuente Hermanos brokerage.

The Fed began a two-day rate-setting meeting on Tuesday, and although the U.S. central bank is expected to keep rates steady investors are keenly awaiting its policy statement following the close of the meeting on Wednesday.

Petrobras Participaciones PCH.BA led losers, falling 4.3 percent to 3.78 pesos, followed by Banco Macro (BMA.BA), which slipped 2.79 percent to 5.92 pesos.

On the foreign exchange market, the peso ARS=RASL strengthened to its highest level since December 2005, rising 0.08 percent to close at 3.015/3.0175 per dollar in formal interbank trade.

In informal trade between foreign exchange houses, as measured by Reuters, the peso strengthened 0.65 percent to 3.0575/3.06 per dollar ARSB=, its strongest level since November 2006.

Argentine bonds <AR/BONOS> closed mixed in light trade.

Government debt traded on the local market rose slightly, up 0.2 percent on average. The session’s gainers were led by the peso-denominated Par bond, which gained 1.2 percent. The dollar-denominated Par fell 0.7 percent.

“Investors are waiting for definitions from the Federal Reserve and the ongoing farm conflict,” one trader said.

Argentina’s Congress began debating a controversial export tax plan on Monday that provoked a series of farmers’ strikes and a political crisis for President Cristina Fernandez. (Reporting by Jorge Otaola and Walter Bianchi; Writing by Kevin Gray; editing by Leslie Adler)

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