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Bolsa de Santiago de Chile cae un 9,6 % en la apertura tras comicios constituyentes

Chilean Stock Market Falls 9.6% After Constituent Assembly Elections

The exchange market also reacted with pessimism to the announcement on the constituent process and the Chilean peso went from 700 to 722 units to the dollar.

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The Santiago de Chile Stock Exchange plummeted 9.6% at the opening after the elections in which Chileans punished the traditional parties and decided that the new Constitution will be drafted by a very diverse convention, with a large presence of independents.

The IPSA, the main Chilean stock market index, which gathers the 30 largest listed companies, suffered its worst fall since March 2020, when the pandemic began in Chile and the borders were closed.

The biggest drops were in basic services and the shares of companies such as Aguas Andinas, Enel Chile and Banco de Chile suffered falls of more than 10%.

Independents and the left and center opposition obtained more than two thirds of the convention.

The exchange market also reacted with pessimism to the announcement on the constituent process and the Chilean peso went from 700 to 722 units to the dollar, the dollar’s biggest jump since November 2019, when Chile was immersed in a wave of violent protests incited by far-left activists.

Investment bank JP Morgan, which warned last week that markets could react “with distress” if the ruling party failed to reach a third, said Monday that “the punishment of traditional politics, the heterogeneity of independents and the extreme left over moderates suggest a regime of greater uncertainty in the future.”

“While independents are the first minority, the nature of such a heterogeneous bloc makes it difficult to have a clear idea of how those votes will interact with the different organic political coalitions,” the bank added.

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