Argentine shares rise

Argentine stocks ended higher on Friday after the government said it will raise gas and electricity rates for big commercial users, partially thawing a two-year rate freeze.
The MerVal leading share index closed up 1.74 percent at 1,089.99 points, rising 3.49 percent this week. Volume was average at 68.7 million pesos ($23.5 million).
"It seems the market reacted very well to the issue of rate hikes but it ended muddled by the weak showing of Brazilian stocks," Ruben Pascuali, a trader at Mayoral Bursatil, said.
Shares in natural gas distributor Transportadora de Gas del Sur ended up 0.13 percent at 2.89 pesos, while Petrobras Participaciones - the Argentine unit of Brazil's state energy company Petrobras - rose 0.09 percent to end at 3.57 pesos.
These two companies are the only ones traded on the MerVal that would be directly affected by an increase in gas and electricity rates.
The MerVal rose further on general gains in share prices.
Meanwhile, the Sao Paulo Stock Exchange's benchmark Bovespa index finished 2.31 percent lower on reports of a possible government corruption scandal.
Government officials said gas and electricity rates would rise anywhere from 15 percent to 35 percent for large consumers like factories, supermarkets and shopping centers.
Mostly foreign-owned utility firms have been clamouring for a rate increase since tariffs were frozen in January 2002, when the government sharply devalued the local peso.
The decision to increase rates comes as Argentina is under mounting pressure to keep a $13.3 billion International Monetary Fund loan package on track. Argentina faces a deadline to repay the lender $3 billion on March 9.
An IMF mission is expected in Buenos Aires next week to begin a second review of Argentina's loan agreement, to ensure it has met economic targets.
Argentina says it will not repay the loan unless it knows the review will be approved.
Recent gains reversed losses on Tuesday, when the MerVal dropped 7.88 percent - its biggest single-day fall in nearly two years - following the freezing of state assets in the United States in favour of a creditor stuck with bad Argentine debt.
Argentina has made little visible progress in talks with creditors holding $88 billion in defaulted sovereign debt. Argentina's peso was slightly firmer, ending at 2.92/2.925 per dollar, compared with Thursday's close at 2.925/2.935 per dollar.