LatinNews Daily - 18 May 2021

In brief: Chilean markets plunge in reaction to ‘mega election’ results

* The index for the Santiago stock exchange (IPSA) in Chile fell 9.33% yesterday (17 May), as the results from the ‘mega election’ held over the previous two days confirmed the poor performance of the country’s traditional political parties, particularly on the Right. This is the IPSA’s biggest drop since March 2020, when the onset of the coronavirus (Covid-19) pandemic prompted global instability in the financial markets. The Vamos por Chile coalition of right-wing parties won just 37 of the 155 seats in the constituent assembly which is tasked with re-writing the country’s constitution, less than the third needed to veto articles in the new text and thus raising the likelihood of a radically progressive constitution being drafted. The Right’s poor performance was reflected across the gubernatorial and municipal elections, also held on 15-16 May. Economists expect the political uncertainty to continue to translate into market volatility and a weak peso.