Black Monday for Argentina. There was not a single indicator that would not reflect the impact of the defeat suffered by President Javier Milei’s party this Sunday in the legislative elections of the province of Buenos Aires. The actions, bonds and currency of Argentina fell strongly, in the midst of the uncertainty that opens with respect to what will happen on October 26 in the national elections, better known as “mid -period” and that are considered fundamental for the president’s reformist impulse.
But the effect was not only inside the borders. On the other side of the mountain range, the Santiago Stock Exchange was infected, which backed 1.3% to 9,089.29 points, breaking with a streak of five consecutive historical maximums. The reason behind this performance is the exhibition of Chilean companies in the neighboring country. Cencosud (which fell 3.9%), had the worst record and is one of the most weighted actions of the selective. Falabella was closely (with a decrease of 3.4%), and they were followed by Andina-B (-3.1%), Latam (-3%) and CCU (-2.7%). Cencosud, Andina, CCU and also Concha and Toro (-1%) have operations in Argentina.
“Investors are less optimistic in their companies, therefore the Chilean companies that have operations in that country were within the most punished. Retail companies were also affected since Argentines have been relevant consumers during the last year, and if their arrival is curb Cristi.
In Argentina, the dollar bonds fell about 0.5 per dollar, one of the largest losses since April, while the S&P Merval index sank 13.3% in pesos and 22.3% in dollars. The most affected actions are: Supervielle (-21.2%); Galicia Financial Group (-20.1%); BBVA Argentina (-20.3%) and Banco Macro (-19.1%).
The state oil company YPF (-11%) and the Energy Giant Vista also dropped, which fell 5.9%. Another of the affected actions, although well below the rest, was the giant of the retail free market, with 1.7%losses. The official exchange rate fell more than 3%, to 1,425 pesos per dollar.
The data reflects the fear that Milei has difficulty maintaining social support to their austerity agenda and that plans to return to global markets are put at risk.
