Overview
- Argentine markets reversed early gains with American Depositary Receipts dropping as much as nearly 7%, the S&P/MSCI Merval falling about 3.9% and the J.P. Morgan 'riesgo país' rising roughly 1.3% to 797 basis points.
- The biggest losses among U.S.-listed Argentine stocks were YPF down about 6.2%, Grupo Supervielle down about 5% and Transportadora de Gas del Norte down about 4.2%.
- Dollar-denominated sovereign bonds mostly traded lower, with Global 2029, 2035, 2038 and 2041 showing losses while the Global 2030 remained essentially flat.
- Market participants pointed to stalled domestic coalition negotiations plus higher external risk from the U.S. midterm elections and the Middle East conflict as the main forces driving selling pressure.
- The current rise brings the 'riesgo país' close to the symbolic 800-point level and follows severe October losses when ADRs plunged up to about 25% and the Merval fell roughly 10%, with the index by J.P. Morgan commonly used to gauge Argentina's sovereign risk.