Colombian stocks dip after deadly quake; LatAm markets stay muted

Colombian equities slipped on Monday after a major earthquake killed at least 20 people and caused widespread damage, adding fresh pressure on the country's newly sworn-in government. The benchmark COLCAP index fell 0.51%, and several dollar-denominated bonds traded lower. The Colombian peso, however, bucked the trend, rising 1.09% against a stronger dollar, making it one of the region's top gainers.

The earthquake comes at a delicate time for Colombia, which is entering a new phase under right-wing President Abelardo De La Espriella. Sworn in on Friday, De La Espriella has pledged a fight against drug trafficking and austerity measures to restore economic confidence. The Trump administration is also planning to provide $1 billion in security assistance to the new government, according to the U.S. State Department.

Policy experts at the Atlantic Council noted that this push marks a sharp break from the turbulent relationship under outgoing President Gustavo Petro. They added that it gives both administrations an opportunity to advance their agenda and could expand opportunities for U.S. business while boosting Colombian production.

Elsewhere in the region, Mexican stocks fell 0.91%, making them the biggest laggards, while the peso dipped 0.13%. The European Union imposed tariffs on terephthalic acid, a raw material for PET plastic, produced in South Korea and Mexico, to protect producers in Belgium, Poland, and Spain. Brazil's Bovespa dropped 0.37%, and the real fell 0.32%.

The MSCI index tracking Latin American stocks slid 0.26%, while the corresponding currencies gauge was flat. Over the weekend, Tehran reiterated it would not reopen the Strait of Hormuz until Washington met certain demands, potentially keeping oil prices elevated and inflation risks front and center.

The muted moves in Latin America stood in stark contrast to Asian emerging markets, where equities rose despite higher oil prices. Investors there seized on a weak U.S. jobs report last week, which lowered the odds of a Federal Reserve interest rate hike and boosted risk appetite. Equities in Chile and Peru were the only gainers in Latin America, rising 0.10% and 0.27%, respectively.