October 31, 2007 / 9:35 PM / 13 years ago

REFILE-Argentine stocks hit fresh high on Fed rate cut

(Refiles to add dropped word “high” in headline)

BUENOS AIRES, Oct 31 (Reuters) - Argentine stocks closed at a record high on Wednesday for a fourth straight session due to selective buying following the U.S. Federal Reserve’s interest rate cut, traders said.

The MerVal index .MERV of 25 leading stocks rose 0.52 percent to end at 2,351.44 points, up from the previous session’s all-time high of 2,339.09 points. It also hit an intraday record of 2,354.73 points.

“The MerVal responded well to the Fed’s interest rate cut, as we were hoping, although it maintained its tendency toward selective trade due to persisting international volatility,” said Augusto Farina, a trader at Almirante Galitis brokerage.

Energy stocks led the gainers in Buenos Aires, getting a lift from surging international oil prices. Electricity producer Central Puerto CEP.BA rose 4.65 percent at 6.3 pesos per share and Brazilian state oil firm Petrobras APBR.BA was up 4.47 percent at 152 pesos per share.

The Fed lowered the overnight federal funds rate by a quarter percentage point to 4.5 percent, hoping to protect the U.S. economy against worries about the housing and credit markets.

Trade volume in Buenos Aires was a healthy 153.5 million pesos ($48.2 million). Of active shares, 64 advanced, 31 declined, and 9 were unchanged.

The Fed rate cut also saw Argentine debt <AR/BONOS> gaining a hefty 2.5 percent on average, with dollar-denominated Par bonds surging 3.8 percent and peso-denominated Boden 2014 paper jumping 2.4 percent.

The peso currency ARSB= closed flat at 3.1900/3.1925 per U.S. dollar in informal trade between foreign exchange houses, as measured by Reuters.

In formal interbank trade, where the central bank regularly intervenes to keep the peso steady, the currency strengthened by 0.24 percent to 3.1400/3.1425 per dollar ARS=RASL.

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