Argentine stocks rebounded in thin and cautious trade on Friday after tumbling the previous day on rumours that Economy Minister Roberto Lavagna would leave the government. The MerVal index of 11 leading shares rose 2.1 percent to close at 1,218.75, making up for nearly all of Thursday's loss of 2.24 percent. Stocks are up 13.7 percent so far this year. But trading volume was just half of Thursday's level at 40 million pesos ($13 million).
The government has not commented on the rumours, but newspapers quoted unnamed officials saying Lavagna had President Nestor Kirchner's confidence.
"The low volume of the rebound makes me cautious and we have to see if the minister was hurt by the rumours of his exit," said Horacio Corneille, trader at a brokerage that bears his name.
The rumours surfaced at a crucial time for Argentina's debt restructuring as the government tries to get the swap back on track after announcing a two-month setback last week.
Group Financiero Galicia, which accounts for over 25 percent of the MerVal, gained 2.83 percent to close at 2.19 pesos.
In the foreign exchange market, the peso continued to slip thanks to Central Bank intervention, easing 0.25 percent to at 2.9575/2.9625 per US dollar.
The Central Bank intervenes on a daily basis to keep the peso weak for export purposes and spent $70 million on Friday compared to $75 million the previous day, the highest so far this year.