Local stocks plummet 3.6% after CFK's stock market reform plan

Buenos Aires stocks plummeted 3.6 percent today with the Merval index hitting 2,368.96 points.

The abrupt fall comes a day after President Cristina Fernández de Kirchner unveiled the government’s National Strategic Insurance Plan yesterday in her 19th national broadcast of 2012.

The President described the project as the “turning of a page for the destination of insurance firms’ funds,” and claimed that “7 million pesos” would be gained from now until May 31 next year, serving as a cash “injection” for “production and infrastructure works.”

The plan effectively introduces regulations that will modify the nature of insurance firms’ activities until 2020. Fernández de Kirchner cited the Federal Reserve’s bailout of AIG in the United States after the 2008 market crash as setting a bad example.

Meanwhile, Argentina's country-risk fell by 0.9 percent, standing at 854 basis points in the JP Morgan EMBI index.