* Colombian stocks plunge after narrower-than-expected
right-wing victory
* Argentina authorizes up to $5 bln debt from international
institutions
* Bolivian crisis shows signs of easing as roadblocks reduce
(Updates with late afternoon trading)
By Ragini Mathur, Avinash P and Purvi Agarwal
June 22 (Reuters) - Colombia's peso strengthened to a
five-year high on Monday, while the country's benchmark stock
index logged sharp declines, as investors assessed right-wing
lawyer Abelardo de la Espriella's narrow victory in the
presidential election.
De la Espriella led leftist senator Ivan Cepeda by less than
1 percentage point after campaigning on pledges to reduce the
size of the state, broaden the tax base, cut corporate taxes and
restart oil exploration.
The peso rose 0.5% to its highest level since January
2021, while Colombia's main equity index reversed
early gains to fall 4.4%. If declines hold, this would be the
index's sharpest one-day fall in three months.
The tight result is expected to limit de la Espriella's room
for maneuver, forcing him to dilute parts of his agenda to
secure support in a divided Congress.
"Winning by 1% is still winning and it's positive for the
market... but the reality is you don't come in with a strong
political mandate that the market had originally anticipated and
passing reforms might be a little bit more complicated than
initially anticipated," said Paul Dmitriev, senior analyst and
portfolio manager for Global X's Colombia ETF.
The result puts Colombia alongside Argentina, Chile,
Ecuador, Bolivia and Panama in a broader regional shift to the
right. Colombian assets had already rallied in recent weeks as
de la Espriella's prospects improved.
"Colombia is still cheap, not nearly as it was even back in
January, but it's about in line with its 10-year average. So
there's still room," said Dmitriev.
Oil prices fell more than 2% after U.S. Vice President JD
Vance said talks with Iranian officials in Switzerland had laid
a "good foundation" for a final peace deal, despite tensions
over the Strait of Hormuz and Lebanon.
LatAm assets outside Colombia remained mixed, with stocks in
Mexico down 0.9%, while ones in Brazil gained
1.3%. Most currencies were little changed to slightly lower
against the dollar.
MSCI's Latin American equities index was up
only 0.1%, while its currencies gauge was off
0.2%.
Meanwhile, markets closely watched for results from Peru's
June 7 presidential runoff, with conservative Keiko Fujimori
projected to win by just over 0.2%.
Argentina's government authorized up to $5 billion in
financing from international entities backed by multilateral
credit organizations, according to the official gazette.
In Bolivia, major protest roadblocks cleared for the first
time in weeks on Sunday, a day after President Rodrigo Paz
declared a state of emergency to solve the crisis that cut off
key routes and choked essential supplies.
Key Latin American stock indexes and currencies:
Latin American market
prices from Reuters
Equities Latest Daily %
change
MSCI Emerging Markets 1801.43 0.85
MSCI LatAm 2970.67 0.10
Brazil Bovespa 170529.97 1.3
Mexico IPC 67094.54 -0.9
Chile IPSA 10901.85 0.12
Argentina Merval 3273513.3 -0.54
Colombia COLCAP 2393.3 -4.38
Currencies Latest Daily %
change
Brazil real 5.1427 0.16
Mexico peso 17.3654 -0.31
Chile peso 906.6 -0.38
Colombia peso 3427.44 0.46
Peru sol 3.3834 -0.08
Argentina peso (interbank) 1461 -0.14
Argentina peso (parallel) 1475 -1.03