The price tour during the month clearly exposed the fragility of a market that had begun 2025 with a notable strength.
The Argentine market went through August one of the most difficult months of the year in stock matter, with a strong deterioration in the prices of actions and a marked fall in the S&P Merval index, reflecting both internal factors of the macroeconomic situation and the impact of political expectations in a context of high volatility. The price route during the month clearly exposed the fragility of a market that had begun 2025 with a notable strengthreaching historical maximums above the 2,800,000 points in January, but that has been caught in a bearish channel from that moment. That descending lateralization, which was deepened as the months advanced, found in August a critical point with a correction that led to the index from the area of 2,400,000 points to 1,900,000 points, which represents a setback greater than 17% in just four weeks, thus marking one of the worst monthly performances in recent times.
The technical photography of Merval confirms what happened. The index had been defending a key support zone close to 2,000,000 points, which had served as a purchase reference for investors. However, The selling pressure intensified in the second half of August, drilling that level and confirming the short -term bassist trend. The market, which in April still found air to bounce in attempts to recover the maximum of 2,400,000 points, finally leaned for a generalized correction process, aligned with the exit of foreign capital from emerging assets and the growing local skepticism regarding the sustainability of economic policies in the previous electoral.
Within the leading actions, the negative performance was generalized, but the toughest blow was suffered by the financial sector, which during this year became the most sensitive thermometer of the local economy. Banco Galicia and Macro Bankthe two main private entities of the stock market, They presented balances that reinforced investors’ concerns. In the case of Galicia, the result of the second quarter showed a significant deterioration of profitability, pressured by the increase in credit blackberry and the difficulty in sustaining margins in a context of high rates and economic recession. The reaction in Wall Street was swift: the Bank’s actions sank in the month, reflecting not only the bad data fact but also the perception that the sector faces a very complicated horizon for the remainder of the year. In the case of Banco Macro, the publication of the balance was also negatively analyzed by the experts, by showing a deterioration in the quality of the assets and a dynamic of income that fails to compensate for the cost of costs. In both cases, the conclusion of analysts was similar: 2025 has been a very negative year for the Argentine financial sector, which fails to rebuild its position and that remains very conditioned by exchange instability and the hardening of monetary policies.
Beyond Galicia and Macro, other roles also dragged strong falls during August. Energy companies and linked to consumption, which had been protagonists of the increases in the first part of the year, could not escape the correction. The adjustment was not exclusive to a sector, but that it was a generalized setback, which made it clear that the market as a whole is under pressure. This dynamic coincides with the performance of Argentine ADRs in New York, which according to local reports had a month for oblivion, sinking up to 25% in some cases. In this way, alert signals multiplied, with the perception that international investors are reducing exposure to Argentine risk, in a context where electoral uncertainty plays a determining role.
In parallel, economic policy also directly affects prices. The Government decided to deepen its high interest rates strategy as a mechanism to contain pressure on the dollar and guarantee success in debt tenders in pesos. In the last tender of the month of August, the rollover was successful and exceeded 100%, in which the treasure managed to renew key maturities and give signs that short -term financial sustainability is under control. However, that victory is accompanied by a very high cost: real interest rates extraordinarily high, which suffocate private activity, They slow down economic growth and generate doubts about the possibility of sustaining this scheme beyond the September and October elections. The great Government’s challenge will be to find a way to progressively reduce those rates without losing control over the exchange market, an extremely complex equation in the current juncture.
The link between the rates policy and the performance of the actions was direct in August. Monetary tightening increases financing, weakens expectations for economic recovery And presses on the balance of financial companies, which see how the risk of default is increased in a recessive scenario. In turn, investors perceive that the government’s margin is increasingly limited, which contributes to a feeling of generalized caution and favors sales in the share market.
As for the sovereign bonds, the dynamic was not positive either. Global and Bonares titles suffered in August the impact of a more adverse international scenario for emerging and local doubts about economic direction. Los Global 2 (GD30-GD35) and Los Bonares (AL29-AL30), four of the most operated roles of the debt exchange, accumulated falls in the month, aligning with the general negative trend of the market. The drop in prices of these bonds reflects an increase in country risk and the perception of investors on the future payment capacity of Argentina. Although the government could successfully overcome debt tenders in pesos, the weakness of the dollar bonds shows that the international market continues to distrust long -term sustainability and that any additional deterioration in public accounts could shoot new tensions.
The combination of a low share market, negative balances in leading banks, sovereign bonds with real interest rates and interest rates at unsustainable levels forms a worrying picture for the month of September. The contrast to the beginning of the year is notorious: from that euphoric January in which the Merval exceeded 2,800,000 points, to this present in which the index is caught in a bearish trend and struggling to hold the floor of 1,900,000 points. The reality blow offered by August forces to rethink the perspectives forward, in a context in which the next months will be crossed by the electoral process, the definitions in monetary policy and the evolution of the real economy.
For investors, the conclusion of the month is clear: Volatility remains the norm in the Argentine market, and prudence is imposed when making decisions. Although there are always opportunities in times of crisis, the deterioration observed in August exposed the structural weaknesses of a small market, very sensitive to external shocks and with a level of political and economic risk that keeps it away from the large international flows. The challenge will be to find a balance that allows you to rebuild trust, something that for now seems distant.
In short, August was a month that marked a before and after in 2025 Argentine stock market. The collapse of the Merval, the weakness of the banks, the difficulties of the bonds and the stiffness of the rates policy draw a complex scenario that can only be reversed if it is possible to generate a shock of trust in the coming months. Until that happens, the market will continue to be conditioned by caution, political fluctuations and background economic fragility. The truth is that the local market can no longer hide its exhaustion and that the margin of maneuver is getting smaller. The fall of more than 17% in August was not an isolated accident, but the expression of a trend that has been consolidated for months and that, if there is no fundamental changes, will continue to weigh on expectations. The Government thus faces a capital challenge: rebuild confidence in an adverse context, where time is pressing and elections will define not only the political course but also the ability to recover a market that today is at a critical crossroads.
Financial Analyst
Source: Ambito
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