The Chilean markets received the rejection yesterday of a proposal for a new Constitution with euphoria. Today the national stock market moves hand in hand with local factors, since Wall Street will not open this day because it is a holiday in the United States. However, as Europe shows, in international markets pessimism prevails in the face of the energy crisis, a concept that gained strength on Friday afternoon after Gazprom indefinitely suspended the flow of gas to Europe.
The eyes of the world’s markets were attentive to how yesterday’s plebiscite in Chile unfolded, the result of which surprised with a wide victory for the option of rejecting the amendment to the Constitution. A fact that, as expected, is being taken very positively by the local market and is being analyzed by various economic leaders in the world.
JP Morgan bank said the election result should have a positive impact on markets due to less uncertainty and lower risk premiums ahead with expectations that the result could temper its plans. “A more gradual and moderate reform push would help mitigate the dimension of uncertainty associated with the government’s economic and financial agenda,” the bank said.
“The results of the plebiscite confirmed the expectations that the market had internalized and the previous surveys regarding the triumph of rejection. However, the difference in percentage was much more comfortable than expected, and that also added a surprise component to it”, commented Aldo Morales, deputy manager of equity studies at BICE Inversiones. In that line, It does not rule out that the local stock market notes a rise of up to 10% during this day.
Ricardo Bustamante, head of trading studies at Capitaria, stated that “this scenario generates optimism in investorsconsidering that the market viewed the Constitution proposal with greater uncertainty, especially because of the impact it would have had on investment and mechanisms to generate a favorable economic cycle.”
“In any case, these movements should be maintained for a short time, since in the coming weeks again we could see signs of uncertaintyconsidering that now a new path will begin for a new Constitution”, he said.
According to experts, the plebiscite also became a government appraisalwhich fights against inflation, the economic slowdown and the internal security crisis.
After acknowledging defeat, Boric also promised to adjust his government team and called all the political forces to a meeting to advance the constitutional process.
“We believe that some of the risk premium built in over the last two years should be written off after last night’s results, as local confidence should improve in the short term”, Citi said in a note.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
