Argentine stocks ended lower on Friday on investor jitters following the government's introduction of new capital controls, traders said. The MerVal index of the 11 leading stocks lost 1.07 percent to 1,435.30 points, accumulating a loss of 4.7 percent so far this year. Argentina on Thursday introduced a one-year, 30 percent compulsory deposit on foreign capital inflows to stem speculation that could stabilise the currency.
The move came just two weeks after the government doubled the amount of time capital must remain in the country to 12 months as foreign investors' appetite for Argentine financial assets grows following completion of the government's debt swap.
The measures aim to prevent the peso currency from appreciating more than the government wants.
"It's evident that the restriction on incoming capital generates a lot of turbulence and affects the market's operations. I see mainly psychological reactions," said Nestor De Cesare, trader with Allaria Ledesma y Compania brokerage.
Traders said some investors also pocketed profits in anticipation of the expiry next week of futures options, an event that typically sends waves through the bourse.
Leading the decline were banking groups, including a 1.65 percent drop to 2.38 pesos by Group Financiero Galicia and a 1.96 percent decline by Banco Macro Bansud to 4.00 pesos.
Steelmaker Tenaris was the most heavily traded share but closed steady at 20.50 pesos.
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