(Updates with closing prices, adds conclusion of IMF meeting)
By Walter Bianchi and Jorge Otaola
BUENOS AIRES, May 10 (Reuters) - Argentina's peso was stable after the central bank sold foreign currency reserves in the spot market on Thursday for the first time since the country announced it was seeking financing from the International Monetary Fund (IMF) earlier this week.
Stocks and bond prices also rose on Thursday, the first session after the government said it would request a "high access standby" financing deal from the IMF as Argentina tries to tackle one of the world's highest inflation rates amid general outflows from emerging markets.
The peso closed up 0.04 percent at 22.71 per dollar, following three straight sessions of losses. It had weakened earlier in the day, prompting the central bank to sell$139.5 million in reserves into the spot market.
Through Wednesday the local currency had weakened 9.12 percent in May and 17.5 percent since the start of 2018, prompting the central bank to sell billions of dollars in foreign currency reserves and hike interest rates to 40 percent.
"The recent government measures to contain capital outflows should allow markets to find some stability," J.P. Morgan said in a note on Thursday, though it said it had reduced the size of its overweight position in the peso due to the recent volatility.
Treasury Minister Nicolas Dujovne met with IMF Managing Director Christine Lagarde in Washington in the afternoon. In a statement after the meeting, Lagarde said the IMF supported Argentina's reforms and that she had instructed her team to "continue discussions toward a Fund-supported program."
Finance Minister Luis Caputo said the deal would guarantee financing through the end of President Mauricio Macri's first term in December 2019 at a "very good" interest rate of around 4 percent.
Bonds have rallied on the IMF talks, with the country's over-the-counter bonds rising 1.5 percent on average on Thursday. Dollar-denominated debt led the surge.
Stocks continued the rebound that began on Wednesday after Congress passed a reform to the country's capital markets law. The benchmark Merval index closed up 6.32 percent on Thursday, led by energy companies.
Despite the calm markets, traders and analysts said the tightening of monetary and fiscal policy and conditions the IMF was likely to propose for the loans posed risks to Argentina's economy. Capital Economics warned the measures would lead to a recession this year, forecasting a 0.5 percent contraction. (Reporting by Jorge Otaola and Walter Bianchi Wwriting by Hugh Bronstein and Luc Cohen Editing by Alistair Bell and Chris Reese)