Merval Recovers to 3,006,248 as 3-Million Level Holds After Selloff

01 Market Snapshot

02 Equities — V-Shape Recovery Tests Conviction

The Merval Argentina today staged a modest recovery to close at 3,006,248, reclaiming the 3-million level after Wednesday’s sharp ~5% selloff to the 2,855,000 area. This is part of The Rio Times’ daily coverage of the Argentine stock market and Latin American financial markets.

Friday’s session was volatile but constructive: the index opened at 2,999,342 (Tuesday’s exact close), dipped to 2,972,174 in early trading, then rallied to 3,038,134 before settling at 3,006,248. The close above 3 million is symbolically important — it signals that the mid-week panic was absorbed and that institutional buyers defended the MA support cluster near 2,860,000. YPF, Galicia, and Pampa Energía led the recovery as energy and financial names bounced from oversold levels.

However, the recovery was tentative. The intraday high of 3,038,134 failed to reach the April 1 high of 3,018,034, suggesting the bounce lacks the momentum to immediately re-test the barrier. The Merval remains 8.8% below its January 28 all-time high of 3,296,502 and has essentially been range-bound between 2,850,000 and 3,050,000 for the past month.

03 The Industry vs. Ideology Battle

The sharpest domestic tension is Milei’s clash with the manufacturing sector. Tire manufacturer FATE’s plant closure — blamed on low-tariff import competition — became a flashpoint when Milei dismissed the industry’s complaints as “cheap nationalism to rob decent Argentines.” The head of the Argentine Industrial Union responded that “without industry there is no nation” and demanded respect, while pointing to sharp production declines across the sector.

The data supports the industry’s concern: FDI was negative US$1.52 billion in January–November 2025, the first deficit since 2003. While the RIGI incentive regime has attracted US$31 billion in announced mining investments and Vaca Muerta continues to produce record output, the manufacturing sector — which employs far more people — is being actively undermined by Milei’s trade liberalization. The two-speed economy (agriculture/energy thriving, manufacturing/construction/retail struggling) is not just an economic problem but a political one, as labor-intensive sectors are precisely where employment gains need to materialize to sustain Milei’s political support through 2027.

04 Technical Analysis — Merval Daily

The wider timeframe chart shows the Merval‘s full journey from the April 2025 lows near 1,600,000 through the midterm election-fueled surge in October–November 2025 and the January 2026 all-time high of 3,296,502. The index is now trading in a consolidation range, sitting above the key support cluster at 2,860,112 (where multiple MAs converge) and below the 3,008,198 resistance. The 200-day MA near 2,501,508 is well below, confirming the secular uptrend.

The MACD at 44,893 is positive with the signal at 42,031 — both lines are nearly converged, and the histogram at −2,862 is essentially flat. This is a market in equilibrium, waiting for a catalyst. The RSI at 65.64 is approaching overbought territory (70) after the recovery bounce, which limits immediate upside. A secondary oscillator at 52.19 is neutral. The technical read: the Merval is consolidating after a massive rally, the mid-week selloff was absorbed at the MA cluster, and the index is back to battling the 3-million level.

05 Key Levels

06 News in Focus

Privatization Pipeline Accelerates

With labor reform through Congress, Milei’s deregulation minister Sturzenegger is advancing the privatization agenda. IMPSA (metallurgical) is complete; freight rail, Buenos Aires water utility, the postal service, and a coal mining firm are next. Partial privatization of two nuclear power plants is also planned, though current legislation limits the scope. Aerolíneas Argentinas — profitable for the first time since re-nationalization — requires separate congressional approval. YPF privatization is complicated by provincial revenue-sharing agreements and ongoing U.S. litigation over the 2012 re-nationalization. One-off privatization revenues may be critical to plugging the fiscal gap if tax receipts continue declining.

Q4 Earnings Season: The Proof Point

Fourth-quarter earnings reports are beginning to filter through, and they represent the most important catalyst for the Merval since the midterm elections. At 19.8x forward P/E — the most expensive market in Latin America — Argentine equities need corporate profitability to validate the reform premium. One618’s Carolina Volman noted that “stocks need clear evidence of a second phase: sustained economic growth, earnings recovery and greater regulatory predictability.” Banks and energy are expected to deliver the strongest results; consumer and industrial names face headwinds from weak domestic demand and subsidy cuts.

Capital Controls: The MSCI Re-Inclusion Question

Argentina’s exclusion from major MSCI emerging market indexes continues to limit passive capital flows. Net ETF inflows of US$630 million in 2024 reversed to outflows of US$200 million in 2025, and the removal of remaining capital controls — a prerequisite for re-inclusion — remains incomplete. The government committed to lifting all restrictions by end-2025 but that timeline has slipped. MSCI re-inclusion would unlock access to the US$50+ billion in EM flows that have boosted Brazil, Chile, and Mexico this year. Until it happens, the Merval will trade at a structural liquidity discount to its peers.

07 Global Context

The Merval’s recovery occurred as global markets stabilized after the Liberation Day anniversary volatility. The Trump–Milei alliance remains a key geopolitical tailwind — the US$20 billion currency swap and IMF backstop provide institutional credibility. But the relationship cuts both ways: Trump’s explicit statement that U.S. support depended on Milei’s electoral performance means any erosion in Milei’s domestic standing could trigger a reassessment of Washington’s financial commitment. Vaca Muerta continues to benefit from elevated energy prices, and the RIGI regime has attracted significant mining interest. But elevated global uncertainty, Brent above $92, and potential Fed hikes weigh on EM risk appetite broadly.

08 Looking Ahead

The Merval is back to battling the 3-million level, with the MACD nearly flat and the RSI at 65.64 approaching overbought. A sustained close above 3,038,134 (Friday’s high) would signal the consolidation is resolving upward and target the 3,100,000–3,200,000 zone. A failure and retreat below 2,906,342 (50-day MA) would re-test the support cluster at 2,860,112.

The week ahead is dominated by Q4 earnings releases and the next inflation print. If monthly CPI drops below 2.5%, it would validate the disinflation narrative and support equities. If it re-accelerates, the “Milei has cured inflation” thesis takes another hit. The privatization calendar, the IMF’s semi-annual review (next due in H1 2026), and the March fiscal data — which will confirm whether the revenue shortfall is deepening — are the medium-term catalysts that will determine whether the Merval breaks out of its range or pulls back toward the 200-day MA at 2,501,508.

This report was published by The Rio Times. For daily coverage of Latin American markets, read our Latin American Pulse and Brazil Morning Call.

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