UPDATE 2-Argentine stocks fall after interventionist named to head central bank

jueves 2 de octubre de 2014 13:38 GYT

(Updates market levels, adds currency data)

By Walter Bianchi and Jorge Otaola

BUENOS AIRES Oct 2 (Reuters) - Argentine stocks and bonds slid on Thursday as the government left markets guessing about policy direction after the appointment of a new central bank chief viewed as sympathetic to the government's ramped-up interventions in the economy.

The benchmark Merval stock index slumped more than 9.2 percent. Traders said financial markets were wary of a possible shift in the regulator's monetary policy to support government efforts to bolster growth in the stagnating economy.

Bond prices also fell as investors digested the nomination of Alejandro Vanoli as the bank's new governor at a time when Argentina is grappling with shrinking foreign reserves, runaway inflation and a tanking currency after defaulting on its debt.

"The stock index's fall is a reaction to the departure of (Juan Carlos) Fabrega who was the only person with common sense in this administration," said Marco Trovato of Buenos Aires-based consultancy Stock Index Forecast.

Traders said the new central bank chief will likely tighten foreign exchange controls in a bid to stanch capital flight.

Vanoli has defended recently the ramping up of state interventions in the economy designed to bolster consumer demand and protect reserves that stand at $27.9 billion, roughly 4-1/2 months' worth of import cover.

His appointment stoked concerns over the central bank's independence and the policy path it will take.   Continuación...