Chilean stocks rose the most this year amid speculation that the six-day decline that pushed valuations to an 18-month low was excessive.
The Ipsa (IPSA) index increased 1.5 percent to 3,984.01 at 3:54 p.m. in Santiago. The benchmark sank 6.5 percent in the prior six sessions, driving the average price-to-earnings ratio of its 40 member stocks to 20.22, the lowest since December 2011.
Pulpmaker Empresas Copec SA (COPEC), the heaviest-weighted stock on the Ipsa, rebounded after its price-to-earnings ratio reached 33.3, the lowest since September. Latam Airlines SA (LFL) contributed the most to the benchmark’s advance.
“It’s a combination of a technical rebound after a violent fall in recent days and some signs of more investor confidence in the region,” German Guerrero, a partner at brokerage MBI Inversiones, said in a telephone interview from Santiago. “Proof of that is that the peso and other Latin American currencies are strengthening.”
Chile’s peso gained 0.8 percent today, the most among major Latin American currencies after the Mexican peso, which advanced 1.9 percent.
The Ipsa sank yesterday to its lowest level since October 2011 as investors withdrew funds from emerging markets on speculation that the U.S. Federal Reserve could reduce its asset-purchasing program amid signs of faster economic growth. The benchmark has fallen 15 percent from a this year’s high of 4,614.66 on Feb. 13.
Copec increased 2.3 percent today to 6,410 pesos. Latam Airlines advanced 3.4 percent to 8,605 pesos.
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