Argentine Stocks Tumble Up to 6% on Wall Street Amid Economic Uncertainty

Argentine stocks faced a sharp downturn, with shares listed on Wall Street plummeting up to 6% and local market indices also registering losses. This decline followed an initial rebound at the start of the week, as investors grappled with a combination of domestic economic pressures and global geopolitical uncertainty stemming from the conflict in Iran.

The country's risk premium saw a slight increase, reaching its highest level in two months, exceeding 460 points. This reflects growing investor caution. Among the top decliners in New York were Telecom (-6.3%), BBVA (-4.9%), Grupo Financiero Galicia (-4.7%), and Transportadora Gas del Sur (-4.7%). In contrast, Mercado Libre bucked the trend, rising 5.7%.

The Merval index in Buenos Aires fell 3.2% to 3,022,341.61 units. Major Argentine companies like Telecom (-3.5%), Banco Macro (-3.4%), and BBVA (-3.4%) also saw significant drops. However, Metrogas surged 11.7% following news of Edenor's acquisition of a 70% stake in the company.

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The market will remain attentive to Wednesday's auction, when the Treasury will face maturities of approximately $4.5 trillion. The recent pressure on rates responded, in large part, to the last auction, in which the rollover exceeded 100% and deepened the absorption of liquidity from the system. This time, the focus will be on the renewal level; a rollover below 100% would release pesos and could help decompress rates.

Economists like Gustavo Ber of Estudio Ber noted that initial positive momentum from corporate earnings reports from Banco Supervielle and YPF had faded. The market's attention is now focused on an upcoming treasury auction, where the government faces maturities of approximately $4.5 trillion. The outcome of this auction, particularly the rollover rate, is crucial for managing liquidity and influencing interest rates.

Furthermore, the upcoming July inflation data, expected on Thursday with an estimated rate around 2%, will be a key factor. The risk premium stands at 467 basis points, the highest since June 10, indicating elevated investor concern. Bond markets showed mixed performance, with local law bonds trading slightly down or up, while Global bonds saw modest gains.

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The market will remain attentive to Wednesday's auction, when the Treasury will face maturities of approximately $4.5 trillion. The recent pressure on rates responded, in large part, to the last auction, in which the rollover exceeded 100% and deepened the absorption of liquidity from the system. This time, the focus will be on the renewal level; a rollover below 100% would release pesos and could help decompress rates.