July 31, 2008 / 9:03 PM / 12 years ago

Argentine stocks turn negative with power firms

BUENOS AIRES, July 31 (Reuters) - Argentine stocks turned down after a four-session rise, as investors took profits in power companies that had jumped a day earlier due to a rate rise, and the peso closed at its weakest level since mid-June on end-month dollar demand.

The benchmark MerVal index .MERV dropped 1.5 percent to 1,919.82 points. Volume was moderate at $37 million. Of active issues, 42 advanced, 54 declined and 22 were unchanged.

Pampa Holding PAM.BA, weighted 11 percent of the MerVal, was one of the biggest percentage losers, diving 6 percent to 1.7 pesos per share.

Pampa had jumping a day earlier when the government announced long-awaited rate hikes for power distributors and transmitters such as Pampa units Edenor EDN.BA (EDN.N) and Transener TRA.BA.

Edenor shed 1.4 percent to 2.04 pesos per share and Transener was off 0.82 percent to 1.2 pesos per share.

“The MerVal accompanied the trend on the Dow, and there was a big fall in electric company issues, which had been the biggest winners with the rates increase,” said Dionisio Corneille, director of the Corneille brokerage in Buenos Aires.

The Dow Jones Industrial Average slumped 1.78 percent in the U.S.

The peso weakened un unusual 0.57 percent to 3.0425/3.0450 per U.S. dollar ARS=RASL in official interbank trade. In the informal market between foreign exchange houses, as measured by Reuters, the peso slid 0.24 percent to 3.0650/3.0675 per dollar ARSB=.

Traders said the high dollar demand was normal as banks close positions at the end of the month. Investors are assuming the Central Bank will not allow the currency to appreciate beyond its current level, they said.

“There’s still wholesale dollar demand since at these levels banks and companies are buyers because the central bank seems to have set a floor at around 3.02 pesos (per dollar),” said one trader. (Reporting by Jorge Otaola, writing by Fiona Ortiz)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below