Chile’s assets dive as government suffers electoral defeat

The benchmark stock exchange closed down 9.3 percent, the biggest decline since the start of the pandemic in March of last year, while the peso fell 2.3 percent.

Chilean assets plunged after the ruling coalition suffered a surprise drubbing in the election for a constituent assembly, placing the writing of a new charter firmly in the hands of the left-wing. The benchmark stock exchange closed down 9.3%, the biggest decline since the start of the pandemic in March of last year, while the peso fell 2.3%. Yields on Chile peso bonds due in 2030 jumped 22 basis points to 3.82%. Candidates from the ruling coalition obtained just 37 of 155 seats on the assembly designed to write the new constitution, according to data consultancy firm Unholster. Contenders unaffiliated with any political parties secured 65 seats. The result means the ruling coalition falls short of the one-third threshold they needed to block market-unfriendly clauses in the new charter.