Chilean markets started the week with significant gains following Sunday's elections, where Jeannette Jara received 26.85% and José Antonio Kast 23.92% of the votes, advancing to the runoff. The IPSA hit a new all-time high of 9,904.44 points, while country risk fell and the dollar depreciated. Analysts attribute the optimism to expectations of a more market-friendly government.
The results of the presidential and parliamentary elections on Sunday, November 16, 2025, triggered a positive reaction in Chilean markets. Official candidate Jeannette Jara fell short of 30% with 26.85%, while José Antonio Kast of the Republican Party reached 23.92%, setting up a runoff with a more opposition-leaning Congress.
Chile's five-year Credit Default Swaps (CDS) dropped four basis points, from 54.868 to 50.669 on Monday, closing at 52.772. JP Morgan's EMBI stayed at 97 points, below 100 since August, continuing a downward trend from 120 points at the start of 2025 and far from 213 in September 2022. Similarly, Brazil's CDS fell from 142.317 to 141.933 and Colombia's from 187.391 to 185.407.
On the Santiago Stock Exchange, the IPSA rose 3.14%, its biggest gain since April, reaching 9,904.44 units, a historical record. SQM-B shares led with 11.26% to $56.299, driven by Ganfeng Lithium's projections of 30-40% lithium demand increase for 2026, pushing prices to 150,000-200,000 yuan per ton. Other shares shone: Banco de Chile +3.68%, Falabella +4.59%, and Santander +3.39%. All IPSA stocks closed positive.
The dollar dropped $1.7 to $924.5, its lowest since March. JP Morgan recommended overweighting the Chilean peso, citing macroeconomic fundamentals and higher odds of a market-friendly government. Credicorp estimated a Kast win could lift the IPSA 5-10% in months.
EuroAmerica's Luis Felipe Alarcón called the CDS drop “significant,” a bet on greater fiscal discipline. BCI's Sergio Lehmann highlighted “greater appetite for Chilean assets.” Vector Capital's Jorge Tolosa noted SQM contributed 1.16% to the IPSA rise. XTB Latam's Emanoelle Santos said Chile's stock market had the world's best performance, boosted by consumption and financial sectors.
Former Central Bank president Vittorio Corbo said the results ease advances in permits and fiscal consolidation to boost growth above 2%. However, the runoff and Parisi's vote (19%) may add volatility, and not all pro-market reforms will have an easy path.
