September 29, 2008 / 9:01 PM / 12 years ago

Argentine stocks, bonds tumble amid global plunge

(Recasts; adds closing stock prices, bonds, peso)

BUENOS AIRES, Sept 29 (Reuters) - Argentine stocks plunged on Monday, suffering their biggest one-day drop since February 2002, and bonds also fell amid deepening market gloom after lawmakers voted down the U.S. government’s bailout plan.

The benchmark MerVal index .MERV closed 8.68 percent lower at 1,545.45 points, accumulating losses of 13 percent since the start of the month.

U.S. legislators rejected a $700 billion bailout plan for the financial industry in a surprise vote that sent global markets tumbling. The Dow Jones industrial average .DJI plummeted 7 percent in the session.

Trade volume on Argentina’s overall market was an unusually heavy $126.5 million. Of active shares, 63 fell, 3 rose and 7 were unchanged.

Leading losses was index heavyweight Tenaris TENA.BA, which makes steel tubes for the energy industry. It sank 17 percent to end at 55.50 pesos a share, stung by a 10 percent drop in the price of U.S. crude oil futures.

Argentine bond prices fell 2.2 percent on average in over-the-counter trade as the global turmoil sent investors fleeing from riskier assets, traders said.

Peso-denominated Par bonds took the biggest hit, shedding 7 percent, according to the bid price ARPARP=RASL.

The sharp downturn overshadowed encouraging moves by the Argentine government to strike a deal with the “holdout” creditors who rejected a 2005 sovereign debt swap.

President Cristina Fernandez was due to meet later on Monday with representatives from three major international banks to discuss the proposed offer.

On the foreign exchange market, the peso weakened just 0.08 percent to 3.1175/3.1200 per dollar ARS=RASL in formal interbank trade, where traders said the central bank acted to stem losses.

The currency has shed 0.64 percent of its value in the last week in interbank trade.

In informal trade between foreign exchange houses, as measured by Reuters, the peso rose, firming 0.16 percent to 3.1400/3.1425 per dollar ARSB=. (Reporting by Jorge Otaola; Writing by Hilary Burke; Editing by Dan Grebler)

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