BUENOS AIRES (Dow Jones)–Argentine stocks and bonds posted broad gains on Tuesday amid a global market rally, but tracked Wall Street and gave back a large chunk of the gains towards the end of trade.
Argentina’s Merval Index of leading shares ended the day 2% higher at 2,555.94 points on moderate trading volume of 40 million pesos ($10 million).
Markets worldwide surged after Greece’s parliament approved a new property-tax law, taking a key step in the country’s efforts to secure further aid from its international creditors and avoid default.
But towards the end of trade, news emerged of a potential rift in the euro zone over Greece’s bailout, fueling heavy selling.
The Global X FTSE Argentina 20 ETF, which tracks shares of Argentine companies listed on international markets, rose 3.5% to $10.62 in New York.
In Buenos Aires, banking group Grupo Financiero Galicia (GGAL, GGAL.BA) led the gains among the index components, rising 4.4% to ARS4.25.
Bonds got a boost as investors whet their appetite for risk after the heavy losses seen in recent days.
GDP warrants, which pay based on reported economic growth, were the big winners. Prices had dropped sharply despite the big payout expected on this year’s growth, which the government has predicted will be over 8%.
The dollar-denominated 2035 GDP warrant shot up 7.5% in price to close at ARS68.50.
Bond traders are anticipating the scheduled $200 Boden 2015 payment on Monday. Frequently a bond payment lifts prices as investors plow the cash back into government debt, although recent volatility is expected to diminish the amount reinvested, financial analysts Estudio Ber said in a market note.
The dollar-denominated Boden 2015 ended 1.1% higher at ARS421.40, with the yield at 8.13%.
The peso closed unchanged for the second day running at ARS4.2045 to the dollar on the MAE local foreign-exchange wholesale market.
-By Shane Romig, Dow Jones Newswires; 54-11-4103-6738; shane.romig@dowjones.com
Soruce: Buenos Aires Herald