BA stocks rise 3.5%, bonds rally after US appeals court decision

Buenos Aires stocks rose by 3.5 percent in today's trade, with the Merval benchmark stock index reaching 2,408.17 points, following a US appeals court's decision to grant Argentina an emergency stay regarding the US$1.33 billion dollar payment demanded by US Judge Thomas Griesa.

The emergency stay order granted gives Argentina more time to argue making a US$1.33 billion payment to investors who rejected two debt restructurings in the nation’s 2002 sovereign debt default.

Furthemore, Argentine bond prices rallied after the court decision receded fears of an imminent debt default.

Sovereign bonds rose 5.5 percent on average, while dollar-denominated GDP-linked warrants surged 22percent on the Buenos Aires Stock Exchange.

Argentina's country-risk fell 13 percent, standing at 1,172 basis points in the JP Morgan EMBI index.

According to Markit data, Argentina's six-month credit default swaps fell to 20 percent in upfront terms from 41 percent at yesterday's close. That implies a cost of US$2 million to insure US$10 million of Argentine sovereign debt for six months, down from US$4.1 million.

One-year CDS tumbled to 30 percent from 48 percent and five-year to 46 percent from 55 percent.

"Happiness will be back in the market for sure for a couple of days," said Sabrina Corujo, a trader at Buenos Aires-based brokerage Portfolio Personal.