October 24, 2008 / 2:49 PM / 12 years ago

UPDATE 1-Argentine markets tumble with global trend

(Adds peso, trader’s quote, updates numbers)

BUENOS AIRES, Oct 24 (Reuters) - Argentina’s benchmark stock index tumbled more than 7 percent in early trade on Friday, and locally traded government bonds fell for an eighth consecutive session, due to fears of a global recession as well as doubts about local economic policy.

The peso currency fell as investors continue to be concerned about a government plan to take over Argentina’s private pension funds, which are the biggest institutional investors in the country.

The MerVal index of leading stocks .MERV was off 7.5 percent at 891.900 points, accumulating a loss of more than 25 percent during the week.

Sovereign bonds traded over the counter in Buenos Aires weakened an average 2.27 percent. Argentine bond prices have been devastated by negative sentiment over the pension takeover, which markets viewed as a sign of government desperation over debt financing for next year.

“This is a tough session since there are lots of worries on the international horizon,” said Juan Pablo Vera, a trader at Tavelli y Compania brokerage in Buenos Aires. “We’ve got one eye on the United States and another on any new political move locally.”

The peso weakened 0.38 percent in formal interbank trade to 3.2675 per dollar ARS=RASL and it lost 1.04 percent in informal trade between foreign exchange houses, as measured by Reuters ARSB=. (Reporting by Jorge Otaola; Writing by Fiona Ortiz; Editing by Jan Paschal)

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