By Taos Turner
BUENOS AIRES--Argentine stocks rose across the board for much of
the day Friday but then sank in late trading after investors
appeared to sell off to capitalize on gains posted in recent
weeks.
Earlier Friday, a U.S. appeals court delivered a blow to
Argentina by ruling in favor of holdout creditors in their bid to
be paid in full on long-defaulted bonds. But the court also delayed
implementation of the ruling n until the U.S. Supreme Court can
decide if it wants to review it.
Analysts said the decision was slightly positive for Argentine
assets in the near term because it gives the country more time to
press its case with the Supreme Court. In addition, Argentina can
continue to make payments on its restructured bonds.
"More than anything the market is up because Argentina just
avoided a technical default, at least for now," said Ezequiel
Estrada, a strategist at Bull Market Brokers in Buenos Aires, in
afternoon trading. "The market's greatest fear was that the ruling
would lead to an immediate technical default on its debt."
Mr. Estrada said stocks, especially those belonging to banks,
had posted significant gains in recent weeks and it appears that
investors moved late in the day to assure themselves of at least
some of those gains.
The Merval stock index reversed its initial gains and closed the
day down 1.02% at 3,903.21 in volume totaling almost ARS98.5
million ($14.25 million).
The most traded companies were the financial conglomerate Grupo
Financiero Galicia SA (GGAL.BA, GGAL), which fell 3% to ARS5.88,
and the steel producer Tenaris SA (TEN.MI, TS), which rose slightly
to ARS198.
The state-run oil and gas company YPF SA (YPFD.BA. YPF) fell
almost 2% to ARS143.
The Argentine peso weakened slightly to ARS5.624 against the
U.S. dollar on the regulated MAE foreign-exchange wholesale market,
versus ARS5.614 in the previous session.
The central bank intervenes in the exchange market daily to buy
dollars and build its foreign currency reserves, while gradually
weakening the peso to help exporters.
In the underground market, the peso was quoted at between
ARS9.15 and ARS9.25, compared with ARS9.15 in the previous session,
according to the newspaper El Cronista, which publishes rates
collected from black-market traders.
Strict capital controls that limit the amount of foreign
currency Argentines can purchase legally have fueled a parallel
illegal market for dollars where people pay a steep premium for the
U.S. currency.
Bonds were mixed.
The 2017 Global Bond rose 0.59% in price terms to ARS761 while
the TVPE GDP warrant, whose performance is tied to economic growth,
rose 0.11% to ARS89.11. In trading immediately following the U.S.
court decision, the TVPE warrant was up by more than 3%.
Mr. Estrada said investors were attracted to the security
because it is protected by U.K. legislation.
Write to Taos Turner at taos.turner@wsj.com