Argentine Stocks Slide as MERVAL Breaks Below Key Support Amid Peso Volatility

Trading data from the Buenos Aires Stock Exchange reveals the S&P MERVAL Index extended losses on May 29, 2025.

It closed near 2,310,000 points after breaking below critical technical support levels. The benchmark dropped 0.66% to 2,355,098 points on May 27, snapping a two-day rally and signaling renewed bearish momentum.

Technical analysis of the 4-hour chart shows the index trading decisively below its 200-period simple moving average, confirming the longer-term downtrend that began after January’s record high of 2,829,730 points.

The recent pullback from the upper Bollinger Band near 2,400,000 points created strong resistance, while widening bands indicate heightened volatility. The 50-period moving average now acts as immediate resistance around current levels.

Market capitalization stands at AR$92.9 trillion with the index carrying a price-to-earnings ratio of 13.8 times and price-to-sales ratio of 1.3 times. Trading volume reached 27.1 million shares during recent sessions, reflecting steady institutional participation despite the downward pressure.

Sector rotation dominated trading activity with materials companies leading gains at 5.90% while telecommunications stocks suffered the steepest declines at 6.01%.

Individual stock performance showed extreme dispersion, with Celulosa Argentina surging an extraordinary 8,593.7% to AR$289.50 over seven trading days. Bolsas y Mercados Argentinos gained 10.4% to AR$218.50, while Aluar Aluminio Argentino advanced 9.1% to AR$830.00.

Conversely, financial sector stocks led declines with Grupo Supervielle plummeting 5.41% to 3,325 pesos and Banco Macro falling 4.05% to 10,075 pesos. Energy giant YPF dropped 3.58% to 34,325 pesos despite broader energy sector strength.

Argentina Market Snapshot

The market faces headwinds from peso volatility following President Milei‘s decision to lift capital controls in April after securing a $20 billion IMF deal. The peso experienced an 11% swing against the dollar, prompting investors to seek dollar safety.

Argentina successfully sold $1 billion in local currency debt to foreign investors for the first time since the Macri administration, with five-year peso bonds carrying a 29.5% coupon.

U.S. steel tariffs of 25% continue pressuring export-dependent companies, cutting Argentine export earnings by $1.5-2.5 billion. The economy shows mixed signals with 5.7% growth in February but inflation remaining elevated at 47.30% in April.

Compared to regional peers, the MERVAL trades at attractive valuations with its current P/E ratio well below historical peaks above 25 times reached in January.

However, momentum indicators signal further downside risk as the index approaches key support levels around 2,300,000 points. Trading Economics forecasts the benchmark reaching 2,235,595 points by quarter-end, suggesting continued pressure ahead of October’s midterm elections.

The index remains 67.91% above its July 2024 low despite recent volatility, though technical patterns suggest consolidation may extend through summer months.