Argentine stocks backtracked on Friday as investors took profits after a rally on Thursday following the government's announcement it had completed its long-awaited debt swap, traders said. The MerVal index of the 11 leading stocks finished 1.63 percent lower at 1,506.12 points after rising 3.07 percent in the previous two days.
After over three years of default, the government said on Thursday it had finally handed over $35.3 billion in new bonds to creditors worldwide in exchange for $62.3 billion in bad debt as well as paying out $680 million in interest payments.
The debt restructuring offer closed in February and was due for completion on April 1 but court action by holdout investors snagged the actual exchange of bonds until now.
"A correction in the market was to be expected once the new bonds had been delivered," said Diego Zavaleta, trader with Besfamille brokerage.
"The inflation figure didn't help matters either. Now expectations are placed on an accord with the IMF," he added.
Argentine consumer inflation was 0.6 percent in May, a notch higher than the average forecast of 0.5 percent.
The IMF said on Thursday it expects to begin loan negotiations with Buenos Aires in July after completing its routine review of the economy.
As usual, banking heavyweight Group Financiero Galicia, with a 24 percent weighting in the MerVal, set the trend for the bourse with a loss of 2.69 percent to 2.53 pesos. Banco BBVA Frances slipped 2.52 percent to 6.58 pesos.
Volume totalled 48.3 million pesos ($16.7 million).
In the foreign exchange market, the peso weakened 0.26 percent against the dollar, dragged down by central bank dollar purchases in thin volume, traders said.
The currency closed at 2.895/2.8975 per dollar but overall this week gained 0.17 percent and was up 2.67 percent so far in 2005.