Colombia’s COLCAP Hangs Near Lows After Energy Woes Weigh

Data from Trading Economics show the COLCAP index closed at 1,641.08 on May 7, down 7.43 points or 0.45%. It traded near the lower bound of its recent 1,640–1,660 range. Investors digested weaker oil profits, mixed global cues and pending Fed decisions.

Energy giant Ecopetrol fell 2.31% after reporting a 22% drop in first-quarter net profit. Domestic investors cited those results as a key drag on the benchmark. Meanwhile U.S. futures gained modestly overnight as traders pinned hopes on U.S.-China trade talks.

European stocks slipped 0.4%, while Asia-Pacific markets mostly rose as Japan’s Nikkei gained 0.28%. Wall Street closed lower, with the S&P 500 down 0.8% on healthcare and tech weakness.

Market breadth in Colombia favored decliners, with downsizing stocks outnumbering gainers by two to one. Banco Davivienda preferred shares topped winners, climbing 1.66% to 22,100 pesos.

Bancolombia preferred rose 1.59%, and Promigas added 1.34%. Canacol Energy and Grupo Argos preferred rounded out the top five with 1.10% and 1.04% gains.

Ecopetrol led losers alongside the Bolsa de Valores de Colombia, down 2.31% and 2.22% respectively. Grupo Aval preferred and Bancolombia Class A fell 0.87% and 0.63%. Cementos Argos also lagged, sliding 1.31% amid softer construction demand signals.

Volume remained moderate relative to the prior session, validating cautious sentiment. EPFR data showed Latin America equity funds saw their largest inflow in 21 months. Foreign buyers targeted financial and industrial names despite today’s broad pullback.

Market Holds Neutral Bias Amid Mixed Technical Signals

Technical indicators pointed to a neutral outlook. The index trades just below its 10, 20 and 50-hour simple moving averages. RSI sits near 51 while MACD remains slightly positive above its signal line. Bollinger Bands contract around current levels, indicating lower volatility ahead.

Immediate support sits at 1,635 points, with resistance at 1,648. A break below support could test the 200-hour moving average near 1,613. Conversely a surge above resistance may invite renewed momentum toward the May highs.

Local interest rates remain at 9.25% after a surprise cut, and inflation eased to 5.09% in March. Unemployment fell to 9.6%, supporting domestic consumption hopes. Investors will focus on Thursday’s Fed statement and Friday’s GDP data for fresh direction.

Benchmarking peers, Mexico’s IPC fell 0.3% while Brazil’s Bovespa lost 0.2% on May 7. Colombia underperformed Asian peers but outpaced the Euro Stoxx 600 drop of 0.4%. The divergence underscores regional sensitivity to energy sector revisions and trade uncertainties.

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