Argentina Bonds, Stocks Buck Wall Street To Rebound

Of DOW JONES NEWSWIRES

BUENOS AIRES(Dow Jones)--Argentine stocks and bonds rebounded Friday, breaking ranks with Wall Street as pension funds jumped in seeking bargains as they continue to adhere to a government requirement to reduce their exposure to investments in neighboring Brazil.

Meanwhile, the peso closed at ARS3.1275 against the dollar in interbank trading, virtually unchanged from Thursday's close at ARS3.1325.

The Buenos Aires Stock Exchange's benchmark Merval Index ended 2.26% higher at 2,314.23, while the broader General Index rose 2.97% to 128,034.41. Volume rose to ARS218.8 million, with ARS182.9 million of that in local trades.

"Today we saw a small technical rebound," said Pedro Kohn, an analyst with local Bull Market Brokers. Among standouts, Telecom Argentina (TEO) shot up 10.87% to ARS15.80, on stronger-than-expected third-quarter earnings. Among Merval heavyweights, Pampa Holding (PAMP.BA) rose 1.73% to ARS2.94, while steel-tube maker Tenaris (TS) fell a mild 0.66% to ARS75 after taking a hit Thursday on lower-than-expected third-quarter results.

In the local debt market, bonds also gained after sharp losses earlier this week on a U.S.-led flight to quality. Among gainers Friday, the price of the Discount bond in pesos rose to ARS117 from ARS116.20, while the Bocon Pro 12 rose to ARS167.50 from ARS165.50.

Kohn said the day's rebound won't be sustainable if Wall Street's downturn continues for much longer.

Besides, "the government has to fix the problem with INDEC," he said, referring to allegations all year that the government is manipulating monthly inflation data downward. The persistent allegations of manipulation have undermined inflation-linked peso notes, such as the heavily traded Discount note.