September 26, 2008 / 9:24 PM / 12 years ago

Argentine stocks slide on oil prices, U.S. bailout

BUENOS AIRES, Sept 26 (Reuters) - Argentine stocks closed lower on Friday as a drop in global oil prices pushed down energy-related shares and investors fretted over delays in a U.S. bailout plan for the ailing financial sector.

The MerVal index of leading shares .MERV shed 0.91 percent to close at 1,692.4 points, but finished the week with a 1.8 percent gain.

On Wall Street, U.S. stocks ended mostly higher as big bank shares staged a late rally on hopes lawmakers would reach an agreement on a $700 billion financial-sector rescue plan this weekend.

“The MerVal didn’t follow suit because of the oil-linked shares,” said Ruben Pasculi, a trader at Mayoral Bursatil.

Oil settled more than $1 lower on Friday, with trading volatile due to uncertainty over the U.S. bailout package.

In Buenos Aires, locally traded shares in Brazilian state-run oil company Petrobras APBR.BA(PETR4.SA) fell 2.51 percent to 73.8 pesos.

Index heavyweight Tenaris TENA.BA(TS.N), the world’s leading producer of seamless steel tubes for the oil industry, shed 3.46 percent 66.9 pesos.

Trade volume on the overall market was $35.5 million. Of active shares, 44 fell, 42 rose and 21 were unchanged.

Argentine bond prices also slipped on jitters over the U.S. bailout plan. Locally traded government bonds fell 0.9 percent on average in over-the-counter trade, led by a 2.3 percent drop in the peso-denominated Par bond ARPARP=RASL.

Debt prices recovered slightly late in the session after President Cristina Fernandez said during a visit to New York that a European bank had joined three others in a proposal to strike a deal with “holdout” creditors who rejected a 2005 debt restructuring.

Earlier this week, the Argentine government said three banks representing holders of up to $10 billion in defaulted Argentine bonds had submitted a proposal to settle the dispute with creditors.

The delay in the U.S. financial plan also pressured the peso currency.

The peso, which is heavily controlled by the Central Bank, fell 0.16 percent to 3.115/3.1175 per dollar ARS=RASL in formal interbank trade. In informal trade between foreign exchange houses, as measured by Reuters, the peso strengthened 0.16 percent to 3.145/3.1475 per dollar ARSB=. (Reporting by Jorge Otaola; Writing by Kevin Gray; Editing by Leslie Adler)

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