Ukraine Crisis Unleashes U.S. Share Selloff; Colombia Steers Clear of LatAm Losses

Gold, a safe-haven asset by nature, has been one of the beneficiaries of the Ukraine-Russia crisis, and remains at an almost eight-month high

Ukrainian troops take part in a military drill outside the city of Rivne on February 16, 2022.  Photographer: Aris Messinis/AFP/Getty Images
February 17, 2022 | 08:20 PM

A roundup of Thursday’s stock market results from across the region

🗽 On Wall Street:

U.S. stock markets chalked up another day of losses on Thursday amid the uncertainty generated by a possible conflict between Ukraine and Russia. Although Moscow reiterated that it has no plans for an invasion, President Joe Biden’s administration insisted that an escalation over Ukraine remains a latent threat.

As Biden departed the White House for a speech in Cleveland, he told reporters that the likelihood of an invasion of Ukraine is “very high” and that he expected an attack in the coming days.

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U.S. ambassador to the U.N. Linda Thomas-Greenfield added that “the evidence on the ground is that Russia is moving toward an imminent invasion”.

The S&P 500 fell 2.12%, while the Dow Jones Industrials lost 1.78%, and the Nasdaq Composite (CCMPDL) followed suit and slid 2.88% during the day.

Nearly 85% of the companies in the S&P 500 saw their stocks fall on Thursday, while the Nasdaq 100, where technology companies are heavily weighted, plunged 3%.

🔑 Key Movements of the Day:

Gold, a natural safe-haven asset, has been one of the beneficiaries of the Ukraine-Russia crisis, and the metal remains at nearly eight-month highs.

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“Events on the Ukrainian border are not only causing investors to seek a safe haven, but it also offers protection against inflation and the prospect of higher oil and gas prices if Russia invades,” said Craig Erlam, senior market analyst, UK and EMEA, at Oanda.

The metal was trading near $1,900.

Oil halted its rally, despite the potential conflict in Ukraine, as the possibility of a nuclear deal being signed with Iran brings the prospect of Iranian crude returning to international markets, at a time when supply has not kept pace with demand.

In the crypto world, Bitcoin (XBT), which is increasingly performing on par with traditional assets, saw a 7.8% drop to $40,652.13 at 16:18 New York time.

“The geopolitical situation in Europe and Ukraine is having a material impact,” Barbara Matthews, founder and managing director of BCMStrategy, told Bloomberg. “But I think it’s underestimated how much monetary policy continues to generate uncertainty and volatility in the markets.”

🥇 The Leader:

The Colombian stock market’s main index Colcap was the only one to show a positive performance in Latin America, although its advance was minimal, rising 0.02%.

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Shares of Grupo Argos (GRUPOARG), Cementos Argos (CEMARGOS), Banco de Bogotá (BOGOTA) and the Grupo Argos preferred stock performed the best.

On the local front, the Autonomous Committee of fiscal regulations said the government’s estimated fiscal target for this year, which is 4.7% below GDP, will be met.

📉 A Bad Day:

Chile’s main index Ipsa (IPSA) saw the sharpest losses in the region, down 2.23%, dragged down by both the Ukraine-Russia uncertainty and that caused by the ongoing debates by the constitutional convention.

“The attention is on the votes of the norms that are being discussed in the Constitutional Convention, given that some of those already approved would present inconveniences for investment and institutionality, and which could lead the Ipsa in the short term to drop below the psychological barrier of 4,000 points,” according to an analyst at Renta 4.

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Brazil’s Ibovespa (IBOV), the leading index of the largest stock exchange by market capitalization in Latin America, closed with a drop of 1.43%. Mexico’s S&P/BMV IPC index shed 1.80%

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🍝 For the Dinner Table Debate:

Gender inequality is a persistent challenge within companies in Latin America. The impact of the pandemic has exposed this issue even more, and while there has been significant progress to remedy the various gaps, there are still some areas that need to be addressed.

A large number of organizations in the region do not have action plans and only a tiny percentage of firms disaggregate their data in terms of intersectionality: that is, by ethnicity, sexual orientation, gender identity, among others.

These conclusions were drawn from the most recent Par Ranking, prepared by Aequales, which provides an annual map reflecting the evolution of Latin American companies in terms of gender.

The Par 2021 Ranking analyzed more than 860 participating companies in 18 Latin American countries, and the companies and the countries in which they are located can be viewed here.