(Updates with closing prices)
By Luc Cohen
BUENOS AIRES, Feb 2 (Reuters) - Argentina power generation company Central Puerto SA's shares plunged on the Buenos Aires stock exchange on Friday as the weaker-than-expected debut price of its U.S.-listed stock took some air out of a two-year long rally.
The underwhelming debut came a day after airport operator Corporacion America Airports also priced its New York initial public offering below initial guidance, raising concerns that surging U.S. bond yields could sour prospects for a wave of Argentine companies racing to list shares on global markets.
"As long as U.S. rates keep rising with this speed, some companies are going to have to rethink whether it is necessary to list now, or if it is better to wait," said Fernando Camusso, director of investment boutique Rafaela Capital in Santa Fe, Argentina.
Central Puerto shares debuted on the New York Stock Exchange at $16.50, below the initial pricing range of $17.50-$21.50 per American Depositary Share (ADS).
While they rallied 7.3 percent on the day to close at $17.70, local shares plummeted 16.7 percent to 35.10 pesos ($1.80) after falling to a one-month low of 32.00 pesos.
One U.S.-traded share is equivalent to 10 in the local market, so the large decline in Buenos Aires essentially reflects the lower-than-expected New York pricing.
Argentine companies including biotech firm Bioceres and food processor Molino Canuelas are looking to follow with overseas listings, taking advantage of investor confidence in President Mauricio Macri's business-friendly policies after more than a decade of populist rule in Latin America's No. 3 economy.
But they could face difficulties from rising Treasury yields, which have hurt global stocks ahead of an expected rate hike by the U.S. Federal Reserve.
Argentina's benchmark Merval stock index fell 5.85 percent on Friday, its largest daily percentage drop in over two years, after hitting a record high the prior session.
The index has been supported by rate cuts following the government's loosening of inflation targets in late December, but concern is growing that it might miss the revised target of 15 percent for 2018, which could mean tighter monetary policy.
"When things are good that’s where you get the most torque, in the context of an accelerating global economy,” said Kevin Caron, portfolio manager at Washington Crossing Advisors at Florham Park, New Jersey. "On the downside, you should expect to see proportional declines." ($1 = 19.459 Argentine pesos) (Additional reporting by Walter Bianchi in Buenos Aires and Rodrigo Campos in New York; Editing by Christian Plumb and Lisa Shumaker)