Argentine stocks close up 7.0pc before default news

BUENOS AIRES, July 31 (AFP): Argentine stocks rose Wednesday on optimism of a deal to avoid a sovereign debt default, hopes that ratings agency Standard & Poor's dashed just after the market closed by declaring the country in "selective default."
The country's Merval stock index rose 6.94 per cent to 8,937.62 points, adding to the 6.53-per cent gain it registered Tuesday.
But just after the bell, S&P made its default ruling, calling time on the Wednesday deadline for the country to make a $539 million payment on its restructured debt.
Traders had appeared upbeat that Economy Minister Axel Kicillof would reach an 11th-hour deal in New York with so-called "holdout" hedge funds that have refused to accept a write-down following Argentina's 2001 default.
The talks were ongoing Wednesday evening.
The holdout funds, which Buenos Aires calls "vulture funds," have won a US court ruling barring Argentina from servicing its restructured debt without also paying them the full $1.3 billion it owes them.
Argentina says paying the holdouts could expose it to claims for up to $100 billion from creditors who had agreed to take a 70 per cent haircut.
Argentine media reports said Wednesday that a group of private banks there was seeking to buy up the holdouts' bonds to avoid a default or put up a guarantee of $250 million to smooth negotiations.