Argentina’s stock market is tanking after the country said on Wednesday night that it would voluntarily default on $US1.3 billion of debt owed to a group of hedge funds.

Near 2 pm ET in New York, the Merval remained down more than 7%.

Thursday’s plunge in the Merval follows a big run-up this week ahead of Argentina’s Wednesday deadline.

Argentina’s default marks the second time in the past 13 years that the country has defaulted on its debt.

Markets around the world also fell, with U.S. stocks deep in the red on the final trading day of the month.

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