Chilean stock market plummets by more than 7% after Gabriel Boric’s presidential victory

The Chilean peso and the Santiago Stock Exchange fell on Monday after the landslide victory of leftist Gabriel Boric in the presidential elections.

The elections were the most polarized of the world’s largest copper producer in three decades, since the fall of the military dictatorship, but finally the legislator won with 55.85% of the votes to the ultra-conservative José Antonio Kast, who achieved 44, 13%.

The leading index of the local market fell 7.27% to 4,045.33 points at 9:40 a.m. local time (12:40 GMT), while the peso lost 2.89%, to 864.50 buyer units and 864 , 80 units seller, amid much volatility, which previously led it to fall as low as 3.67%.

“Among the guidelines of the Boric Investors are most concerned about the increase in the tax burden, the increase in social spending and the reform of the pension system“, He said G markets on a note.

Boric, supported by a left-wing coalition with the Communist Party, He has moderated his tone in recent weeks and in his first speech as president-elect called for broad agreements to be generated, as well as promised to advance social rights with fiscal responsibility and taking care of the economy.

However, he also mentioned that he would oppose mining projects that “destroy”, such as a controversial iron and copper project.

BCA Research specified in a note to clients that it expects a considerable sell-off of Chilean stocks and currencies after the victory of Boric.

“Once the dust settles, a buying opportunity could arise in Chile. Political volatility will be contained and Congress will reject extreme policies“, Referred the firm.

The elections had the most massive turnout since voluntary voting was established in the country in 2012, with 8.4 million voters of the 15 eligible to vote.

Negotiable funds or ETFs linked to Chile in the United States also fell in pre-market operations after the triumph of Boric.

With information from Reuters.