Anniversary of August 12
On August 12, 2019, the Buenos Aires Stock Exchange fell 37.91% in pesos and the dollar jumped 19.1%, generating a true stock market crash. Argentine stocks on Wall Street plummeted to 60.1% in pesos..
On Sunday, August 11, 2019, a political news event occurred that was not anticipated by financial market agents: the candidate of the Frente de Todos Alberto Fernández defeated then-President Mauricio Macri by 16 points. in the primary elections, which would mark the prelude to what would be his triumph in the presidential elections two months later.
When operations resumed on Monday, August 12, 2019, what is remembered in the markets as "Black Monday": the index The S&P Merval of the Buenos Aires Stock Exchange fell 381% in pesos and almost 501% in dollars., and the exchange rate jumped by 19%, in what would be the prologue to a devaluation of the peso that continued in the following years
Consequences of the stock market crash
In that August alone, the official dollar exchange rate accumulated a rise of 35.8%, amidst a sharp capital outflows and a drastic drop in reserves of the Central Bank that forced the outgoing government to impose severe restrictions on the purchase of foreign currency starting in September 2019.
The S&P Merval stock index fell 37.9% in one day, to a close of 27,530 units, led by the decline in shares in the financial and energy segments. The fall of the Merval in dollars was 46.2%, considering the jump of 17.2% in the wholesale exchange rate.
This debacle of the Argentine variable income was reflected in the Historic lows in ADRs and shares of Argentine companies traded on Wall Street.
To have a clearer dimension of the impact of this fall, it must be remembered that the Merval, measured in dollars, fell by half, from 965 points to 527 points., the lowest value since 525 points on December 11, 2012. Worse still, this fall was so dramatic that it was the second worst fall in the entire history of the stock market, only followed by the Sri Lankan crash of 1989.
The market's decline was so dramatic that it took more than four years to return to that same value. And it's still far from the peak value reached in January 2018.
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