Chilean stock market and currency fall after presidential victory of leftist Boric

The Chilean peso and the stock market 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 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 local time (12:40 GMT), while the peso lost 2.89%, to 864.50 buyer units and 864.80 seller units, amid much volatility , which previously drove it to 3.67%.

“Among the guidelines of the Boric program that most concern investors are the increase in the tax burden, the increase in social spending and the reform of the pension system”Said Mercados G in a note.

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

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

BCA Research said in a note to clients that it expects a sizeable sell-off of Chilean stocks and currencies following Boric’s victory.

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

Tradable funds or ETFs tied to Chile in the United States also fell in pre-market operations after Boric’s triumph.