Milei Implodes: Argentine Stocks Plunge 20% as Country Risk Surges
The Argentine financial landscape just got a lot rockier. Following La Libertad Avanza’s crushing defeat in the Buenos Aires provincial elections, assets are in freefall. Can anything save them?
Key Points
- Stocks hit hard: a shocking 24% drop is being reported.
- The S&P Merval index dropped 13.3% in pesos and 16.4% in dollar terms.
- Country risk is approaching a staggering 1,100 basis points.
- Major banks such as BBVA, Banco Macro, and Grupo Supervielle have taken significant hits.
Market Overview
After the potential political ramifications became clear, investors panicked. It was one of the most substantial sell-offs in recent Argentine history. The S&P Merval index nosedived to 1,732,923.77 points in pesos, while in dollar terms, it plummeted to 1,201.71 – the lowest level seen in 13 months.
“Argentina’s political risk premium could extend over time.” – J.P. Morgan
Impact on Sovereign Bonds
The effects weren’t limited to just the stock market. Sovereign dollar bonds also faced the music, with losses ranging in double digits. Leading this decline was the Bonar 2041, which dropped by 10.6%.
Country Risk Surging
As bond prices crashed, the country risk index skyrocketed. J.P. Morgan’s estimates show this approaching 1,100 basis points, a significant signal of increasing investor fear.
Summary
With Argentine stocks already down by almost 70% this year and countless areas in red, investors are advised to reconsider their positions. The economy’s future appears clouded with political uncertainty, raising the question: will it recover?
Opinion & Analysis
Political shifts can have lasting effects on market trends. As we’ve seen, the recent elections have sent shockwaves through the Argentine financial markets. If you’re looking to stay ahead in volatile markets like this, taking calculated risks and staying informed is key.
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