Milei's victory in the midterm elections ignites market trends, with Argentine concept stocks and ETFs soaring across the board

According to the Zhitong Finance APP, on Monday, after the party of Argentine President Javier Milei achieved an overwhelming victory in the mid-term parliamentary elections, the country's financial markets experienced a festive rally. Voters supported this leader's economic reforms through fiscal austerity measures and free market reforms. Stimulated by this positive news, Argentine assets collectively strengthened. The election results also ensured the continuation of the U.S. financial aid program to Argentina. Previously, U.S. President Trump had clearly stated that economic aid to Argentina would be contingent on the election results. Trump had earlier warned that, while willing to provide support, if Milei failed to win the mid-term elections on October 26, the U.S. would terminate the aid agreement. In early October of this year, the U.S. Treasury had just reached a $20 billion currency swap framework agreement with Argentina and directly purchased Argentine pesos. After the election results were announced, several Argentine concept stocks surged in pre-market trading on U.S. stock exchanges. Banco BBVA (BBAR.US) soared over 36%, Grupo Financiero Galicia (GGAL.US) jumped 35%, Grupo Supervielle (SUPV.US) rose 31%, Banco Macro (BMA.US) climbed 35%, and both Argentine YPF (YPF.US) and Pampa Energía (PAM.US) recorded a 26% increase, while Cresud (CRESY.US) rose 17%. Although Argentina's benchmark S&P MERVAL index has fallen 17.7% year-to-date, the Global X MSCI Argentina ETF (ARGT.US), which provides U.S. investors with exposure to Argentine stocks, surged 16% in pre-market trading, narrowing its year-to-date decline to 10%. In recent months, Argentina's economy has continued to face challenges. In April of this year, the International Monetary Fund reached a preliminary agreement with Argentina on a $20 billion rescue plan. This mid-term election renewed half of the seats in the House of Representatives and one-third of the seats in the Senate. Milei's La Libertad Avanza party received about 41% of the votes, while the left-wing opposition Peronist coalition garnered approximately 31%. Just over a month before the rise of Argentine-related assets, the domestic stock market and U.S.-listed ETFs had experienced a round of declines. At that time, the political environment became tense due to the ruling party led by Milei losing key local elections in the Buenos Aires province