Argentine stocks rebound in New York and Buenos Aires ahead of the Buenos Aires elections.

The Argentine financial market is experiencing a session marked by a rebound in local stocks and in the shares of companies listed on Wall Street. Just two days before the Buenos Aires legislative elections, the S&P Merval index is rising sharply on the Buenos Aires Stock Exchange, and Argentine ADRs are following suit in New York. However, the improvement in equities contrasts with the weakness of bonds and a country risk that remains at elevated levels.

Shortly after noon, the S&P Merval rose 2.8% in pesos and 2.2% in dollars, to 1,988,662 points and 1,440 units, respectively. This represents a partial recovery after a difficult 2025, with cumulative declines of more than 20% this year.

Among the leading stocks were Grupo Supervielle (up 5.4%), Edenor (up 5.3%), and Grupo Galicia (up 4.2%). Also posting significant gains were YPF (up 4.6%), Banco BBVA (up 3.8%), and Banco Macro (up 3.5%). Meanwhile, Central Puerto rose 2.5%, Cresud 2.7%, and Transportadora de Gas del Sur 3%. The only significant decline was Grupo Financiero Valores (down 0.3%).

The positive sentiment was echoed in New York, where Argentine bank ADRs led the gains: Supervielle climbed 5.1%, Galicia 4.4%, Macro 3.6%, and BBVA 3.4%. In the energy sector, YPF gained 4.3%, Transportadora de Gas del Sur 4.1%, and Edenor 4%.

Other companies such as Mercado Libre (+1.2%), Tenaris (+2.6%), Pampa Energía (+1.3%), and Central Puerto (+2.9%) also joined the rally. In contrast, Globant fell 2.8% and Ternium 0.7%.

According to analysts, bargain buying after weeks of correction, coupled with expectations that the Treasury will be able to contain exchange rate volatility, partly explains the stock rally.

Unlike equities, sovereign bonds continue to show weakness. The Global 2030 bond rose 0.6%, while the Global 2041 and 2029 bonds fell 1.5% and 0.4%, respectively.

Country risk, as measured by JP Morgan, fell slightly to 893 basis points, although it remains near its highest level in five months. On Tuesday, it had climbed 8.3%, reflecting the tension leading up to the Buenos Aires elections and the partial easing of the exchange rate controls.

With the backing of the International Monetary Fund (IMF), the Treasury decided to intervene in the foreign exchange market. On Tuesday, it sold nearly US$150 million and on Wednesday, it absorbed about US$35 million. According to Finance Secretary Pablo Quirno, this was a one-time episode of liquidity and not a change in regime.

The measure seeks to stabilize the peso at a time of low foreign currency liquidation by the agricultural export sector. The interbank dollar remained around $1.363 after having reached $1.400 at the beginning of the week, just 5% below the upper limit of the exchange rate band.

Investors' reaction comes amid an uncertain electoral scenario. Voting will take place in the province of Buenos Aires this Sunday, and national elections will be held at the end of October. Political volatility is pushing traders to seek refuge in dollars, while stocks find a temporary respite.

Think tanks such as the Encuentro Foundation warned that the Treasury's intervention "accentuates the deinstitutionalization" of the economic system by taking over functions that belonged to the Central Bank. The Mediterranean Foundation emphasized that, beyond the current situation, structural problems persist, such as the state's management deficit and the lack of clarity in exchange rate policy.

The surge in interest rates, which have ranged between 40% and 150% per year over the course of one day, reflects the degree of stress on the financial system. The rising cost of credit is already impacting economic activity and delinquency, traders warned.