BUENOS AIRES, Nov 28 (Reuters) - Argentine stocks closed higher on Friday for the fifth straight session, buoyed by banking shares seen benefiting from a government plan to encourage Argentines to repatriate and invest their funds.
The benchmark MerVal index .MERV ended up 2.25 percent at 993.99 points, accumulating a gain of 19.9 percent this week but still ending November down 1.7 percent.
The MerVal has sunk 55 percent since last May, affected by market volatility linked to the global financial crisis and some government moves -- such as the nationalization of private pension fund assets -- that were seen hurting investment.
"The effect of the funds repatriation continues boosting banking shares, which allowed the MerVal to reverse initial losses spurred by profit-taking," said Guido Macchi, a trader at Julio Macchi brokerage.
President Cristina Fernandez this week unveiled a plan to protect jobs and economic activity, offering tax breaks to companies that retain and hire new workers and to Argentines who bring home funds they have stashed abroad for investments in government bonds and infrastructure or other projects.
Argentine banks are major holders of government bonds, and shares in Argentina's Banco Macro (BMA.BA) (BMA.N) led the MerVal's gains Friday, jumping 10.1 percent to 3.71 pesos a share in Buenos Aires.
On the broad market, volume was thin at $16.3 million. Of active issues, 40 advanced, 16 declined and 9 were unchanged.
Meanwhile, locally traded government bonds rose 1.5 percent on average in over-the-counter trade, jumping nearly 10 percent over the week thanks partly to the government plan.
Friday's gains were led by a 4 percent rise in the dollar-denominated 2033 Discount bond ARDISCD=RASL, based on the ask price.
On the foreign exchange market, the peso weakened 0.44 percent against the dollar to 3.3725/3.750 ARS=RASL in formal interbank trade, pressured by private demand for greenbacks to cover companies' end-of-the-month obligations, traders said.
The currency slipped 0.15 percent to 3.41/3.4150 per dollar ARSB= in informal trade between foreign exchange houses, as measured by Reuters.
The central bank intervenes in the foreign exchange market nearly every day to stabilize the peso's value. (Reporting by Jorge Otaola and Walter Bianchi; Writing by Hilary Burke; Editing by Andrea Ricci)