Chilean stock indexes extended declines for a second week on Friday, amid continued uncertainty about US markets. The all-market IGPA stock index edged down 0.13 percent to 14,566.28 points, while the trade-weighted blue chip IPSA index fell 0.32 percent to 3,240.88 points.
This marks the tenth straight negative close for the IGPA, and the ninth for the IPSA. The bourse has been rocked by fresh news about US credit problems and a selling run by Chile's large, private pension funds (AFPs) on news that government regulators would give them one year to comply with limits on stock investments.
"There's been news about the subprime crisis for the last couple of months and just when you think the worst has passed, more bad news crops up," said Rodrigo Andaur, an analyst with FIT Research. "The problem of the AFPs is another problem that's not going to go away immediately." On the Santiago exchange, electric generator Endesa Chile slipped 0.65 percent to 718 pesos.
Other blue chip declines included leading wine exporter Concha y Toro, down 2.78 percent to 1,225 pesos, while telecommunications company Entel fell 2.12 percent to 8,075 percent. Heavily weighted Endesa Spain regional energy group Enersis helped offset index declines as its stock reversed an early loss to rise 1.07 percent to 186.50 pesos a share.
Wood pulp exporters Copec rose 0.64 percent to 8,220 pesos, while CMPC advanced 0.84 percent to 19,000 pesos after Merrill Lynch upped its rating to "buy" on Friday, and raised its target price to 24,027 pesos.
Next week analysts expect volatility to remain ahead of new US data. "Next week I think volatility is going to remain," Andaur said. "There will be statistics on US housing sales, which is an important."
"Stock markets are still in negative territory, and that's kept the peso down in recent days, but we've also had a deterioration in copper prices, which is another factor that weakens the peso. Chile is the world's largest copper producer and prices for the red metal fell to below $3.15 per pound on Friday. Chilean inflation-adjusted five-year central bank bond yields slipped to 2.78 percent compared with 2.79 percent in the prior session.