Colombia COLCAP Rallies 2.31% to 2,226 on Election Results

01 Market Snapshot

02 Key Movers

03 Market Commentary

Monday’s +2.31% jump to 2,225.68 was a striking display of domestic resilience for the Bolsa de Valores de Colombia, which shrugged off the global panic triggered by the US-Israeli war on Iran to rally on the back of Sunday’s congressional election results. The COLCAP opened at 2,166.18, near the prior close of 2,175.41, touched a low of 2,165.41 before buyers aggressively pushed the index to a high of 2,235.57 and a strong close at 2,225.68.

The election result was the catalyst. Colombia’s March 8 legislative vote produced a divided Congress where no single bloc holds a governing majority. Pacto Histórico, President Petro’s coalition, retained its position as the largest Senate force with approximately 25 seats, but Centro Democrático surged to ~17, and when combined with the Liberal Party, Alianza por Colombia, and Conservatives, centre-right parties command a substantial legislative counterweight. The simultaneous Gran Consulta produced Paloma Valencia as the centre-right presidential candidate for the May 31 first-round vote — a figure markets view as “pro-market.”

The prior week (Feb 27–Mar 6) had been brutal for the COLCAP, which fell 2.14% amid election uncertainty and global Iran war jitters. The banking sector was hammered: Mineros (−18.64%), PF Davivienda (−13.28%), Banco de Occidente (−13.13%), Banco de Bogotá (−10.12%), and PF Grupo Sura (−9.57%). Ecopetrol was the lone bright spot, surging 8.3% for the week to $2,425 as the oil price spike directly benefits the state petroleum company.

Monday’s rally was even more remarkable given the global backdrop: Asia opened in freefall — Nikkei −7%, KOSPI −8% (circuit breaker) — and the S&P 500 was down ~0.84% in early trading. Yet the BVC moved in the opposite direction, driven entirely by the post-election political repricing.

04 Currency

The peso delivered a powerful post-election rally. USD/COP opened at 3,780, touched a session low of 3,728.50, and closed at approximately 3,745 — a decline of $50.55 against the TRM of 3,795.55. According to Set-FX, the session saw $1.311 billion traded across 1,877 transactions, indicating strong conviction behind the peso move.

The new TRM for March 10 was certified at 3,744.84 — a drop of $50.71 or 1.34%, erasing the pre-election gains entirely. Alejandro Sánchez of Aval Casa de Bolsa noted that the divided Congress, “independent of who wins the presidency, is considered positive for investors and is why the dollar is falling in Colombia.” Juan Pablo Vieira of JP Tactical Trading added that Paloma Valencia’s emergence as a presidential candidate was interpreted as the possibility of a “pro-market” administration, further boosting confidence.

The COP’s strength is notable because it moved against the global trend — the DXY at ~98.9 remains elevated and most EM currencies weakened on Iran fears. Colombia’s unique oil-producer status (Brent above $100 supports fiscal revenues) combined with the positive political signal created a rare divergence from regional peers like the Chilean peso, which weakened ~3.3% over the same period.

05 Technical Analysis

Daily (1D):

Monday’s candle (O: 2,166.18, H: 2,235.57, L: 2,165.41, C: 2,225.68) was a strong bullish engulfing pattern with the close near the highs of the session. The long lower wick barely below the open at 2,165.41 shows that sellers had minimal control, while the large body (+2.31%) reflects conviction buying. Price recovered above the lower Bollinger Band and moved back toward the cluster of moving averages overhead.

The MACD remains negative: MACD line at −20.64, signal line at −24.18, and histogram at −44.82. While all three components are below zero confirming the intermediate-term bearish bias, the histogram’s recent contraction from deeper negative territory hints at fading downside momentum. A bullish crossover (MACD above signal) has not yet occurred but could form in the next 2–3 sessions if the rally continues.

The RSI reads 44.53 (fast) and 42.53 (slow) — recovering from the oversold zone but still below the neutral 50 level. The 200-day SMA sits at approximately 1,961.83, well below current price, confirming the longer-term bullish trend remains intact. Key overhead resistance is clustered at 2,240–2,258 (declining short-term MAs) and 2,302–2,312 (mid-Bollinger / horizontal resistance). The index needs to reclaim 2,300 to shift the intermediate-term bias from bearish to neutral.

06 Forward Look

Political Repricing — How Deep Does It Go?

Monday’s rally was driven by a single catalyst: the election result. The divided Congress signals that the next president — regardless of party — will face legislative checks on radical policy shifts. For markets, this reduces the tail risk of constitutional overreach that had weighed on Colombian assets. Paloma Valencia’s victory in the Gran Consulta adds a credible centre-right candidate to the May 31 first-round ballot. However, polls still show leftist Iván Cepeda leading in intention-of-vote surveys, so the presidential race remains fluid.

Oil — Colombia’s Double-Edged Sword:

Unlike Chile (a net energy importer), Colombia benefits directly from higher oil prices through Ecopetrol revenues and government royalties. Brent above $100 is unambiguously positive for the fiscal balance in the short term. However, the inflationary pass-through of higher fuel and transport costs complicates the Banco de la República’s position. With the policy rate already at 10.25% after January’s surprise 100 bps hike, further tightening would hammer credit growth and the banking sector, which makes up ~58% of the COLCAP. If Brent sustains above $100, expect the COP to outperform regional EM peers but bank stocks to remain under pressure.

US Macro Calendar — Week of March 10:

US CPI (Wednesday), housing data (Thursday), and Q4 GDP plus PCE deflator (Friday) dominate the global macro calendar. Hot inflation readings would reinforce the DXY and pressure EM currencies, partially offsetting the COP’s election-driven gains. The US payrolls shock (−92,000 jobs) opens the door to a Fed rate cut as early as June, which could provide EM relief and widen Colombia’s already-substantial interest rate differential (10.25% vs Fed’s 3.50–3.75%).

Global Contagion vs. Domestic Tailwinds:

Asia’s Monday carnage (Nikkei −7%, KOSPI −8%, S&P 500 futures −1.7%) had no visible impact on Monday’s BVC session — a rare decoupling driven by the political catalyst. However, if the Iran conflict escalates further or if Brent pushes toward $120–$150 as Kpler analysts warn, even Colombia’s oil-producer hedge would be insufficient to offset the global risk-off tide. The VIX at ~35 signals continued turbulence ahead.

Verdict

The COLCAP’s 2.31% post-election bounce was the day’s standout performance among our four Latin American markets, driven entirely by domestic political repricing. A divided Congress, the emergence of a credible centre-right presidential candidate, and Ecopetrol’s oil-price windfall combined to overpower the global risk-off backdrop that hammered Asia, Europe, and US markets. The peso’s $50 decline against the dollar was equally striking, reflecting genuine capital flows rather than thin-market noise.

Technically, the MACD histogram at −44.82 and RSI at 44.53 remain in bearish territory, and the index sits 13.1% below its January ATH of 2,562. But the 200-day SMA at 1,961.83 is 11.8% below, keeping the longer-term bullish structure firmly intact. The immediate test is whether the COLCAP can reclaim the 2,240–2,258 MA cluster (R1) and extend toward 2,302 (R2).

Bias: CAUTIOUSLY BULLISH — the election-driven rally, COP strength, oil-producer tailwind, and wide interest rate differential (10.25% vs 3.50–3.75%) support the near-term case. A sustained break above 2,302 (R2) with Brent between $90–$110 turns bias Bullish. A failure at 2,240 combined with Brent above $120 (inflationary overshoot) or adverse presidential polling shifts bias to Neutral.

Disclaimer: This report is for informational purposes only and does not constitute investment advice. All data sourced from BVC, TradingView, La República, Valora Analitik, Infobae, Bloomberg Línea, Banco de la República, DANE, dolar-colombia.com, Set-FX, and other public sources. Verify all figures independently before making investment decisions.

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