BUENOS AIRES, June 25 (Reuters) - Argentine stocks rallied in line with other regional markets on Wednesday after the U.S. Federal Reserve kept its key interest rate unchanged, traders said, while trade in bonds and the peso remained jittery.
The benchmark MerVal stock index .MERV rose 1.17 percent to 2,091.92 points, led by stocks linked to commodities and energy. Volume stayed a slack $19.6 million, with more than $3 million of that accounted for by blue-chip steelmaker Tenaris (TENA.BA).
“The MerVal reacted to the Fed’s decision, with investors buying up stocks that have fallen sharply in recent sessions,” said Horacio Corneille, a trader who runs his namesake brokerage.
A decision to raise U.S. interest rates would have made riskier emerging market assets less attractive.
Among the biggest gainers in Buenos Aires was Brazil’s state-run energy company Petrobras APBR.BA, which gained 3.77 percent to 110 pesos per share.
Of active issues 30 rose, 27 fell and 17 were unchanged.
On the local debt market, Argentine bonds <AR/BONOS> closed mixed in light trade for a second session due to persistent political uncertainty both inside Argentina and abroad.
In Argentina, investors are watching for a resolution in a three-month conflict between the government and the country’s farmers. They are also tracking the health of the U.S. economy after the Federal Reserve kept interest rates unchanged.
Locally traded government debt inched up 0.2 percent on average. The session’s gainers were led by the dollar-denominated Boden 2014 bond, which gained 2.7 percent. The Discount bond in pesos fell 1.3 percent.
“The central bank has already spent more than $1 billion on bonds, but genuine demand still hasn’t returned to the market,” one trader said.
On the foreign exchange market, the peso ARS=RASL stayed at its firmest levels against the dollar since December 2005, closing at 3.015/3.0175 per dollar in formal interbank trade due to continued central bank intervention, traders said.
Bigger dollar sales by grains exporters also kept the peso steady, they added.
In informal trade between foreign exchange houses, as measured by Reuters, the peso weakened by 0.57 percent to 3.0775/3.08 per dollar ARSB=, its strongest level since the start of 2007. (Reporting by Walter Bianchi; Writing by Helen Popper; editing by Gary Crosse)