Chilean stocks with the most business in Brazil opened this Monday with sharp declines on the Santiago Stock Exchange, according to La Tercera. The blow came after Luiz Inácio Lula da Silva's victory in Brazil's presidential runoff against Flávio Bolsonaro, the market's preferred candidate.
Enel Américas fell the most in early trading: it dropped 7.07% to $85. Latam Airlines fell 6.02% to $21.7, its lowest level since May 19. According to the same outlet, the two accounted for the largest trading volumes at the start of the session.
The reason is simple. If you own shares in a company that earns much of its money in Brazil, what happens to the Brazilian economy and currency directly affects your investment. Latam describes itself as the region's largest airline group, with a market share of around 40% and a similar share in Brazil, South America's largest market.
Cencosud also fell more than 2%. The retailer entered Brazil in 2007 and now operates seven brands there: Prezunic, Bretas, GBarbosa, Mercantil Atacado, Perini, Spid and Giga Atacado, the last of which was acquired in 2022. The decline adds to a poor year on the stock market: the stock is down 36% in 2026.
CMPC, the paper company linked to the Matte group, fell 1.98% and has lost 33.5% this year. Brazil accounts for around 35% of its total assets. It is home to the company's main growth project, the Natureza pulp megaproject in Rio Grande do Sul, which obtained a key permit last week.
In Brazil, the reaction was much harsher. The ADRs of major Brazilian banks on Wall Street were falling more than 25%. ADRs (certificates that allow foreign shares to be traded in New York) serve as an early gauge of investor sentiment. ETFs, funds that track a stock index, linked to the Brazilian stock market posted declines of more than 25% before the opening, and real futures fell around 10%.
Ignacio Mieres, of brokerage XTB, attributed the movement to the election surprise. "Prediction markets and much of the financial market had anticipated a Bolsonaro victory, especially after his performance in the first round," he explained. Lula, who finished second in the first round, will govern Brazil for the fourth time.
The source does not specify how the session closed in Santiago or whether the declines continued throughout the day. The next developments to watch are the opening of the São Paulo stock exchange and the real's performance, which will determine how much of the blow carries through to Chilean companies with operations in that country.
