COLCAP Jumps +2.11% as Colombian Peso Rallies on Election Results

Market Snapshot

Equities

The MSCI COLCAP index surged 2.11% to 2,272.65 on Monday, its strongest single-day gain in over a week, as investors returned from the weekend buoyed by election results that signaled a balanced political landscape ahead. The TradingView feed recorded an open at 2,222.90, a high of 2,272.65 (matching the close), and a low of 2,221.20, indicating sustained buying pressure throughout the session.

The rally was broad-based, driven by renewed appetite for Colombian equities after Sunday’s legislative elections produced a divided Congress that markets interpreted as a check on radical policy shifts. The Pacto Histórico secured 25 Senate seats (up from 20), while the Centro Democrático gained four to reach 17, and the Partido Liberal held 13. Paloma Valencia’s commanding win in the right-wing consultation—with over 3 million votes—further reassured markets about competitive presidential dynamics ahead of the May 31 first round.

The prior week had been punishing for the BVC: the COLCAP fell 2.14% over the five-day period ending March 6, with Banco de Occidente dropping 13.13%, Banco de Bogotá losing 10.12%, and PF Grupo Sura shedding 9.57%. Ecopetrol, however, had bucked the trend with an 8.3% weekly gain, buoyed by oil prices that briefly exceeded $100 per barrel during the Iran crisis escalation. ETB was the week’s top performer at +10.44%.

The oil price crash on Monday—Brent plunging over 11% to $87.80—created a complex dynamic for Ecopetrol, which benefits from higher crude but saw the $100-plus windfall evaporate in a single session. Monday’s equity rally suggests the election catalyst outweighed the oil headwind, at least for now.

Currency

The Colombian peso was the strongest emerging-market currency on Monday, rallying over 1% against the U.S. dollar. The TRM for March 10 was certified at $3,744.84, a decline of $50.71 (−1.34%) from the prior session’s $3,795.55. The spot market saw the peso trade as low as $3,728.50 and as high as $3,780.00, with $1.311 billion traded across 1,877 transactions.

Looking ahead, the TRM for March 11 has already been certified at $3,710.50, extending the peso’s gains by another $34.34 (−0.92%). This two-day move has erased most of the currency stress built up during the pre-election week, when the dollar had pushed toward $3,807.

The peso’s strength was driven by two converging forces: domestic political relief and global dollar weakness. Alejandro Sánchez at Aval Casa de Bolsa noted that the divided Congress and the strong opposition showing gave investors confidence in institutional balance. Andrés Moreno told Bloomberg Línea the high vote count for Paloma Valencia was an additional surprise that calmed markets. On the external front, the dollar weakened broadly as Trump’s signals about ending the Iran conflict deflated the energy-driven safe-haven bid, with the EUR/USD extending gains to 1.1645.

The BanRep policy rate stands at 10.25% following the 100-basis-point hike on January 30. With CPI still at 5.35% (well above the 3% target), markets are pricing additional hikes of 200–300 bps through the cycle. Wells Fargo has warned that while the peso may rally post-elections, it could weaken once relief fades. February CPI data, due later this month, will be the next key domestic catalyst.

Technical Analysis & Chart

The daily chart shows the COLCAP posted a strong bullish engulfing candle on Monday, opening at 2,222.90 and closing at the session high of 2,272.65—a textbook signal of buyers in control. The index reclaimed territory above the 2,257 area, which had served as support in late February before breaking down.

Momentum indicators remain subdued but are inflecting. The RSI stands at 48.12 with its signal line at 44.25, both below the neutral 50 mark but turning higher—suggesting the index is emerging from oversold conditions rather than overbought. The MACD histogram at −12.10 is above its signal (−27.20) and trigger (−39.30), with the histogram narrowing toward zero—a nascent bullish crossover setup.

The Bollinger Bands show the index bouncing from near the lower band and moving toward the midline, which aligns with a mean-reversion scenario after the heavy selling of the past two weeks. The 200-day SMA sits near 1,964.86, well below current price, confirming the long-term uptrend remains intact despite the recent correction from the January 27 all-time high of 2,562.00.

Volume was notably higher than the depressed levels seen during the pre-election week, when turnover had dropped 32.6% to $1.31 trillion. The return of volume alongside price strength adds conviction to Monday’s move, though follow-through will be needed to confirm a trend reversal.

Key Levels

Global Context

Global markets experienced a historic session on Monday as the war-driven energy premium collapsed. Brent crude underwent a roughly $30 swing in less than 48 hours, touching nearly $120 before crashing to settle at $87.80—a move traders dubbed a “round trip.” The catalyst was a series of de-escalatory signals from Washington: President Trump described the Iran war as “very complete” and floated the idea of the U.S. taking control of the Strait of Hormuz. Energy Secretary Chris Wright then posted (and quickly deleted) a false claim that the Navy had escorted an oil tanker through the strait, triggering a 17% intraday plunge before partial recovery.

Wall Street absorbed the chaos with surprising composure. The S&P 500 slipped just 0.21% to 6,781.48 after recovering from steep early losses, while the Dow gained 239 points after plummeting nearly 900 points intraday. The VIX eased to 24.93. JPMorgan’s trading desk warned that a 10% correction remains a high-probability event if oil sustains triple digits, while the IEA called an emergency meeting to discuss a coordinated release of strategic stockpiles.

Gold rose 2.44% to $5,228.40 per ounce, benefiting from the weaker dollar and safe-haven flows as the geopolitical fog persisted despite de-escalation rhetoric. Silver surged 6.25%. The dollar weakened broadly, with the EUR/USD extending its rally to 1.1645.

For Colombia specifically, the oil crash creates a double-edged dynamic. Lower crude eases inflationary pressure and reduces the energy cost pass-through that had been weighing on consumer prices, but it also dents Ecopetrol’s earnings outlook and government royalty revenues. The EIA now forecasts Brent above $95 for the next two months before declining below $80 in Q3 if the conflict de-escalates, a trajectory that would challenge Colombia’s fiscal accounts.

Looking Ahead

Today (March 11): U.S. CPI data for February is the week’s marquee event. The report will signal whether the oil-driven inflation spike has begun filtering into consumer prices. A hot print could dim rate-cut expectations and strengthen the dollar, putting pressure on peso gains.

This week: U.S. initial jobless claims (March 12), GDP second estimate and University of Michigan inflation expectations (March 13). Colombia’s BVC begins operating under the new summer schedule synchronized with the NYSE, with trading hours shifting to 8:30 a.m. – 3:00 p.m. starting March 10.

Next week: The Federal Reserve rate decision on March 18 will dominate global markets. While rates are expected to hold, the statement and dot plot will be scrutinized for any shift in language regarding the Iran-driven inflation risks. February PPI data also drops on the 18th.

Political calendar: With legislative elections settled, focus pivots to the May 31 presidential first round. The key matchup is shaping up as a multi-candidate race featuring Iván Cepeda (Pacto Histórico), Paloma Valencia (Centro Democrático), Claudia López (center), Roy Barreras (Frente por la Vida), and Sergio Fajardo (center). Market analysts at Goldman Sachs, UBS, and Wells Fargo are watching whether a centrist or center-right outcome can lower the risk premium currently embedded in Colombian assets.

Verdict

Monday was the session Colombian bulls had been waiting for. After two weeks of relentless selling driven by war fears, election anxiety, and the strongest dollar in months, the COLCAP posted its most convincing reversal candle since early February. The catalyst was unambiguously political: a divided Congress, strong opposition turnout, and the emergence of Paloma Valencia as a credible right-wing presidential contender gave investors confidence that Colombia’s institutional guardrails will hold regardless of the next president.

The peso’s outperformance among emerging markets confirmed the message. When a currency rallies 1% on a day when global oil crashes 11%, geopolitics remain fraught, and the VIX sits above 24, it tells you the domestic story is powerful enough to override external headwinds—at least for now.

The risk factor to watch is the oil trajectory. If Brent stabilizes in the $85–$95 range, Colombia benefits from decent fiscal revenues without the inflationary pain of $100-plus crude. If the Strait of Hormuz crisis reignites, all bets are off. The other wildcard is the BanRep rate path: at 10.25% and climbing, Colombia is the tightest major economy in Latin America, and every additional hike raises the probability of a harder landing.

Bias: Cautiously bullish. The election rally has legs as long as oil doesn’t retest $100 and the presidential race doesn’t swing sharply left. The peso at $3,710 has room to appreciate further if the political premium continues to unwind. Support at 2,211; resistance at 2,302. Watch CPI today for the next directional cue.

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