BUENOS AIRES, May 19 (Reuters) - Argentine stocks jumped on Monday, and the peso currency and bonds firmed as investors hoped farmers and the government would soon end a prolonged conflict over soy export taxes.
The benchmark MerVal index <.MERV> added 2.67 percent to 2,194.11 points. On the broad market, volume was brisk at $35 million. Of active issues, 59 advanced, 16 declined and nine ended unchanged.
Shares in Grupo Financiero Galicia <GFG.BA>, which controls Argentina's biggest bank, soared 6.0 percent to 1.93 pesos per share.
"The Merval focused on growing expectations regarding talks between the agricultural sector and the government. This expectation especially favored government debt and bank shares," said Francisco Marra, analyst with Bull Markets Brokers in Buenos Aires.
The farm strike has hammered Argentine bonds, and since local banks have obligations to hold government debt, when prices of those bonds fall so do bank shares.
On Monday farm leaders were meeting to consider whether to lift their protest over oilseed export taxes that the government hiked in March.
Farmers have been holding back grains for export and their strike has caused a political crisis by challenging President Cristina Fernandez's economic policy, and threatens to slow overall economic growth.
Government bonds on the local market rose 1 percent on average on Monday after falling sharply last week. The peso-denominated par bond rose 2.3 percent while the Boden 2014 in dollars rose 2.2 percent, traders said.
The peso currency gained 0.7 percent to 3.210/3.215 per U.S. dollar <ARSB=> in informal trade between foreign exchange houses as measured by Reuters. In formal interbank trade the peso slipped 0.08 percent to 3.1475/3.1500 per dollar <ARS=RASL>.
The central bank sold dollars last week to prevent a slide in the peso as Argentines jittery over the farm crisis sought save haven in greenbacks.
Traders said the peso had not been under pressure on Monday as investors expect a resolution to the farming crisis, but that the Central Bank intervened at the end of the session with some dollar sales to mark the closing price. (Reporting by Walter Bianchi, writing by Fiona Ortiz; Editing by Leslie Adler) ((Reuters Messaging: fiona.ortiz.thomsonreuters.com@thomsonreuters.net; e-mail: buenosaires.newsroom@thomsonreuters.com; +54 11 4318-0663)) Keywords: MARKETS ARGENTINA/
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Keywords: *TOP NEWS* Latin America
By Daniel Bases
NEW YORK, May 19 (Reuters) - Investors pushed Argentine sovereign debt higher on Monday in case a deal is made between striking farmers and the government while rising oil prices propelled Venezuelan bonds higher.
Record high oil prices viewed through the prism of energy company profits pushed stock prices higher and helped lift emerging market equity indexes to their best levels this year and in the case of Latin America another record high.
Trading volumes however were low on Tuesday, leaving price movements exaggerated, traders said. Turkey, one of the more heavily traded credits, had a market holiday that contributed to the dearth of volume.
Yield spreads on the benchmark JPMorgan Emerging Markets Bond Index Plus <11EMJ><.JPMEMBIPLUS> were unchanged at 256 basis points over slightly stronger U.S. Treasuries.
Argentine spreads narrowed by 13 basis points to 539 basis points on the JPMorgan index.
Farmers in Argentina, the world's No. 2 corn exporter and No. 3 soy supplier, went on strike for the second time in two months on May 8 over a sliding-scale export tax that farmers say effectively caps prices for their goods. A farm leader said on Monday there was consideration in the ranks to restart talks with the government.
"No one wants to be short in the event there is a resumption of negotiations between the government and the farmers. I think this is just tactical speculative flows... Any sign they are willing to move back to the table to negotiate should be interpreted positively," said Paul Biszko, senior emerging markets analyst at RBC Capital Markets in Toronto.
Argentina's benchmark Discount Bonds rose 1.0 point in price to bid 83.00 on Monday <ARGGLB33=RR>.
Venezuela's yield spread on the EMBI+ index narrowed by 7 basis points to 640 basis points as the surging price of oil - above $127 a barrel -- fills Caracas' coffers with more oil revenues.
Venezuela's benchmark 2027 bond <VENGLB27=RR> rose 0.75 points in price to bid 89.938, yielding 10.471 percent.
"Yield spreads are pretty flat and trading volumes are low. Emerging stocks are following broader market averages higher and oil is giving a boost to Venezuela," said one credit trader in New York.
The rise in oil prices and the follow-through positive impact on energy company profits was one reason cited for a rise in global stock markets.
In emerging markets, where oil is often the big export, the Morgan Stanley Capital International emerging markets stock index <.MSCIEF> climbed 0.75 percent on Monday to its best closing level since mid-December.
MSCI's Latin American stock index closed up 1.26 percent on Monday, lifting the index to its third successive record close <.MILA00000PUS>.
One market that will draw more focus in the coming months is Turkey, which faces major political upheaval if the country's Constitutional Court says the ruling AK Party and its leaders breached the nation's secular constitution by supporting Islamist activities. The AK Party denies the charges and says they are politically motivated.
A government minister, speaking to Reuters said that the Islamist-rooted AK Party now believes the chances for its survival are bleak and has begun planning how to return to power as a new movement.
(For full story, click on [ID:nL18278566])
Turkish assets have been sold off but the selling pressures have subsided for the time being. RBC's Biszko believes that may not last through through the middle of the year.
"The fact is this is still two to three months away at the earliest, so no one is really concerned about it yet. As we near closer to July or August, I think that would be the timing we would be looking at to scale down exposure," Biszko said. ((daniel.bases@reuters.com; +1 646 223 6131; Reuters Messaging: daniel.bases.reuters.com@reuters.net)) Keywords: MARKETS EMERGINGDEBT/
BUENOS AIRES, May 19 (Reuters) - Argentina's primary budget surplus jumped 73 percent in April from a year earlier, to 2.79 billion pesos ($869 million), Economy Minister Carlos Fernandez said on Monday.
The result was in line with expectations in a central bank survey, where the median forecast was 2.7 billion pesos. The surplus in April 2007 was 1.62 billion pesos.
($1 = 3.21 pesos) (Reporting by Damian Wroclavsky; writing by Fiona Ortiz; Editing by Dan Grebler)
((e-mail: buenosaires.newsroom@thomsonreuters.com; telephone: +54 11 418 0618; Reuters Messaging: fiona.ortiz.thomsonreuters.com@thomsonreuters.net)) Keywords: ECONOMY ARGENTINA/BUDGET
May 19 (Reuters) - Casablanca Grand Prix men's singles first
round results from Morocco on Monday (prefix number denotes
seeding, * new result)
* Santiago Ventura (Spain) beat Arnaud Clement (France) 7-6(6)
6-1
* 2-Gael Monfils (France) beat Guillermo Garcia-Lopez (Spain)
6-7(8) 7-5 6-0
Guillermo Coria (Argentina) beat Peter Polansky (Canada) 4-6
6-4 6-3
Younes El Aynaoui (Morocco) beat 8-Victor Hanescu (Romania) 6-2
6-7(6) 6-3
4-Marc Gicquel (France) beat Ruben Ramirez Hidalgo (Spain) 6-3
6-0
1-Jo-Wilfried Tsonga (France) beat Albert Montanes (Spain) 6-4
7-6(10)
Lamine Ouahab (Algeria) beat Martin Vassallo Arguello
(Argentina) 7-5 6-2
5-Julien Benneteau (France) beat Florian Mayer (Germany) 2-6
6-3 6-4
Gilles Simon (France) beat 7-Florent Serra (France) 6-2 5-7 6-3
Pablo Cuevas (Uruguay) beat Jun Woong-sun (South Korea) 6-4 6-1
Rainer Schuettler (Germany) beat 6-Chris Guccione (Australia)
6-4 6-7(5) 6-2
3-Agustin Calleri (Argentina) beat Thierry Ascione (France) 3-6
6-1 6-2
(Compiled by Infostrada Sports; Edited by Patrick Johnston)
((patrick.johnston@reuters.com; +44207 542 7933; Reuters
Messaging: patrick.johnston.reuters.com@reuters.net; For the
latest Reuters Premier League and international football news
see: http://football.uk.reuters.com/))
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Next: Argentine soy market idled by farm protests