Argentine shares up on relief over U.S. court stay

BUENOS AIRES Fri Aug 23, 2013 10:53am EDT

BUENOS AIRES Aug 23 (Reuters) - Argentine bank shares rose on Friday after a U.S. appeals court ruled against the country in its dispute with holdout bond investors but put injunctions on hold pending an appeal to the U.S. Supreme Court.

The U.S. high court is likely to consider whether to hear the case in the fall. If the justices agree to hear the case, a ruling would be issued by the end of June.

Grupo Financiero Galicia shares rose 2.6 percent and those of Banco Macro shot up 4.3 percent as investors registered relief over the stay of injunctions.

The case threatens to push Argentina toward a debt default if it is finally ordered to pay $1.3 billion to bondholders who declined to participate in bond restructurings and are demanding to be paid 100 cents on the dollar.

President Cristina Fernandez vows never to pay holdouts, whom she calls vultures and accuses of picking over the bones of the South American country's catastrophic 2002 sovereign default.

But a final decision by the government not to pay them could block Argentina from meeting its obligations to holders who participated in 2005 and 2010 bond restructurings, under which investors accepted steep reductions in repayment terms.