September 30, 2008 / 9:22 PM / 12 years ago

Argentine stocks rebound in Wall Street's wake

BUENOS AIRES, Sept 30 (Reuters) - Argentine stocks ended sharply higher on Tuesday, a day after suffering their biggest drop in more than six years, as Wall Street and other regional bourses rebounded on renewed hopes for a U.S. bailout plan.

The MerVal benchmark index .MERV closed up 3.41 percent at 1,598.17, after shedding 8.7 percent in the prior session.

The index sank 10 percent during the month of September.

“The Argentine market was very dependent on Wall Street’s movement,” said Leopoldo Olivari, a trader at Bacque brokerage.

On Monday, U.S. legislators rejected a $700 billion bailout plan for the financial industry in a surprise vote that sent global markets tumbling.

But investors turned optimistic a day later, betting that Washington would revive the plan after President George W. Bush and congressional leaders pledged to continue talks.

The Dow Jones industrial average .DJI surged 4.68 percent on Tuesday after shedding 7 percent a day earlier.

Trade volume on Argentina’s overall market was a moderate $40.3 million. Of active shares, 35 rose, 29 fell and 14 were unchanged.

Rebounds were seen in stocks related to the oil industry, with Brazil’s Petrobras APBR.BA (PETR4.SA) rising nearly 11 percent to 70 pesos a share, and steel-tube maker Tenaris TENA.BA (TS.N) gaining 8.1 percent to 60 pesos.


In contrast, Argentine bond prices steepened their losses as investors continued selling off riskier assets amid global market uncertainty, traders said.

Argentine debt traded locally fell 2.5 percent on average in over-the-counter trade with losses seen again in peso-denominated 2038 Par paper, which shed 4 percent, according to the bid price ARPARP=RASL.

On the foreign exchange market, the peso weakened 0.48 percent to 3.1325/3.1350 per dollar ARS=RASL in formal interbank trade due to robust private demand for greenbacks, accumulating losses of 3.27 percent in the month.

In informal trade between foreign exchange houses, as measured by Reuters, the peso slumped 0.40 percent to end at 3.1525/3.1550 per dollar ARSB=, shedding 2.85 percent of its value during September. (Reporting by Jorge Otaola; Writing by Hilary Burke)

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