Colombian stocks extended their rally to five straight sessions Wednesday as oil shares surged higher amid a better-than-forecast earnings report from state energy company Ecopetrol (ECOPETROL.BO, EC).
The Colcap, which is the Colombian Stock Exchange's benchmark index, climbed 1.6%, to end at 1,814.12 points. Wednesday's gains put the index at its highest closing level since December 2010, effectively erasing its 14% decline last year.
Ecopetrol shares rose 2.6% to close at COP5,850, its highest ever. The oil company late Monday announced a 28% increase in unconsolidated net income in the first quarter compared with that quarter of 2011, to $2.5 billion.
Markets in Colombia were closed Tuesday for the May Day labor celebrations.
Meanwhile, the Colombian peso ended near its strongest level in more than a year, at COP1,756.60 for a dollar from COP1,762.40 a day earlier, according to Set-FX.
The Colombia Central Bank said Monday it would extend by three months its daily purchase of at least $20 million in the forex market, aimed at preventing excessive peso strength. Some investors were hoping the bank would increase the minimum amount to $30 million or so.
The dollar purchases will now continue to at least Nov. 4, from the previous planned end-date of Aug. 2.
The yield on Colombia's peso-denominated bond due July 2024 closed at 7.090% after beginning the session at 7.108%. Yields have been declining for weeks due to lower consumer price inflation that's expected to continue trending lower.
-By Dan Molinski, Dow Jones Newswires; 57-310-867-6542; [email protected]