Buenos Aires – Argentine financial markets experienced a surge Wednesday, defying global volatility linked to escalating tensions in the Middle East. The S&P Merval index climbed 2.3% to 2,762,722.16 points, while the dollar-denominated Merval rose 2.6% to 1,894.79 points.
The gains were broad-based, with stocks across sectors participating in the rally. Banco de Valores led the advance, jumping 6.2%, followed by YPF, Argentina’s state-owned energy company, which rose 5.3%. Loma Negra was the exception, declining slightly by 0.3%.
Argentine sovereign dollar bonds also saw increases, with the Global 2029 bond rising 0.8%, and the Bonar 2029 bond gaining 0.7%. The country’s risk premium settled around 554 basis points, according to market reports.
The positive performance occurred despite a backdrop of global uncertainty fueled by the conflict in the Middle East and rising oil prices. According to reports from GBM, the conflict has created a “compás de espera” – a waiting stance – in risk markets. Donald Trump’s recent statement that the war in the Middle East was “practically finished,” as reported by La Nación, briefly boosted market sentiment, though the long-term impact remains unclear.
Analysts noted the lack of significant domestic drivers for the market’s gains, beyond the Central Bank of Argentina’s (BCRA) reported purchases of reserves. Gustavo Ber, an economist, highlighted that banking and energy stocks were again leading the rebound, with increased liquidity in these assets continuing to attract investor attention.
On the broader panel, Domec shares soared 7.5%, while San Miguel, a fruit producer, saw a gain exceeding 7%. ADRs also participated in the rally, with YPF, Telecom Argentina, and Cresud rising by 6%, 4%, and 3.7% respectively. Conversely, MercadoLibre and Bioceres Crop experienced declines of 0.3% and 2.8% respectively.
The surge in Argentine markets contrasts with earlier concerns this week, when global stock exchanges and oil prices initially reacted negatively to the escalating Middle East conflict. The initial shock saw oil prices reach a three-year high, prompting fears of a broader economic slowdown. However, Trump’s comments offered a temporary reprieve, shifting market focus.
The conflict in the Middle East continues to be a key factor influencing global financial markets, with ongoing volatility expected as the situation evolves. The impact on Argentina’s economy remains closely tied to international developments and the trajectory of global commodity prices.
