June 26, 2008 / 9:12 PM / 12 years ago

Argentine stocks fall amid regional sell-off

BUENOS AIRES, June 26 (Reuters) - Argentine stocks fell on Thursday, pressured by losses in bourses throughout the region, while bonds slipped further and the peso weakened.

The benchmark MerVal stock index .MERV shed 0.92 percent to end at 2,072.48 points. The U.S. and Brazilian markets both slumped about 3 percent.

“The MerVal was once again pressured by a massive tumble in international prices, which prompted more aggressive selling in banking and service company shares,” said Hernan Labrone, an analyst at Fenix Compania Financiera.

Losses were led by Argentine banking group Grupo Financiero Galicia GFG.BA, which sank 6.85 percent to 1.63 pesos a share.

The MerVal’s fall was cushioned by gains in index heavyweight Tenaris TENA.BA, a world leader in making steel tubes for the energy industry, which got a boost from record-high crude prices. Tenaris rose 2.29 percent to 111.80 pesos.

Trade volume rose to a moderate $33.7 million. Of active issues 8 rose, 67 fell and 15 were unchanged.

On the local debt market, Argentine bonds <AR/BONOS> fell by 1.2 percent on average in over-the-counter trade.

Argentina’s debt spreads over comparable U.S. Treasuries widened 23 basis points to 604 11EMJ, their worst performance since late April, according to JPMorgan’s EMBI+ index.


On the foreign exchange market, the peso ARS=RASL weakened by 0.41 percent to 3.0275/3.0300 per dollar in formal interbank trade as private investors bought up greenbacks, traders said.

In informal trade between foreign exchange houses, as measured by Reuters, the peso weakened by 0.24 percent to 3.0850/3.0875 per dollar ARSB=.

The central bank has been selling dollars on the market to bolster the peso amid uncertainty surrounding a farm dispute that began in mid-March. One trader said when the central bank stays on the sidelines, the peso tends to weaken.

Meanwhile, a Reuters poll of 43 business leaders attending a seminar on Wednesday showed that more than 70 percent of respondents did not think the peso would fall below 3.0 per dollar in the near future.

“Three pesos could be a floor for the dollar; I don’t think they’ll let it fall further,” one respondent said. (Reporting by Jorge Otaola and Walter Bianchi; Writing by Hilary Burke; Editing by Leslie Adler)

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