–Argentine stocks, bonds sink in line with Wall Street

–Dollar-denominated bonds also fall

–Formal peso weakens while black-market rate strengthens

 
   By Taos Turner 
 

BUENOS AIRES–Argentine stocks and bonds fell in tandem with stocks on Wall Street Tuesday as concerns mounted about economic problems in the European Union and the U.S.

The Merval index fell 2% to 2387.77 in volume totaling ARS41.8 million ($9.1 million).

The financial group Grupo Financiero Galicia SA (GGAL.BA, GGAL) was the second-most-traded stock. It slid about 1% to ARS3.03. The state-run oil-and-gas company YPF SA (YPFD.BA, YPF) fell 4.4% to ARS82, leading the declines. Steel producer Tenaris SA (TS, TEN.MI) fell 3.4% to ARS119.85.

Investors often buy these stocks only to sell them in New York as a way of getting money out of Argentina.

Bonds performed poorly across the board.

The price of the Boden 2015 fell 2.13% to ARS552.50 while the AA17 bond price slid 2.75% to ARS493.50. The Boden 2012 fell 2.55% to ARS649.

“With the noise out of the euro zone still on center stage, and with tension in Spain worsening amid credit warnings about Germany, local assets again saw themselves carried away by the adverse climate that is spreading around the entire world,” the consulting firm Estudio Ber said in its market commentary.

Meanwhile, the value of Argentina’s black-market peso strengthened Tuesday to around ARS6.43 to the dollar, compared with about ARS6.45 the previous day, according to diverse local media reports and online references.

The black-market peso is much weaker than the official exchange rate, which closed at ARS4.5725 to the dollar on the MAE local foreign-exchange wholesale market, compared with ARS4.5705 the previous session.

The black-market peso’s fluctuations coincide with the imposition of severe limits on the purchase of U.S. dollars and other currencies in the formal foreign-exchange market.

Write to Taos Turner at taos.turner@dowjones.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

July 24, 2012 18:20 ET (22:20 GMT)

Copyright (c) 2012 Dow Jones Company, Inc.