Chile IPSA +1.69% as Latam Airlines Soars 7% on Oil Drop

Market Snapshot

Equities

The S&P IPSA advanced 1.69% to 10,604.52 on Monday, building on recent recovery sessions after the brutal correction that saw the index lose over 13% (currency-adjusted) in four days during the first week of March. The TradingView feed showed the session opening at the low of 10,428.64 and climbing steadily to a high of 10,633.38 before closing at 10,604.52—a strong bullish candle with no lower wick, indicating buyers controlled from the open.

Latam Airlines was the session’s standout, soaring over 7% as the Brent crude collapse from $120 to $87.80 dramatically improved the airline’s fuel cost outlook. Diario Financiero noted that airline stocks globally surged on the oil reversal, with Delta and United leading the S&P 500 for similar reasons. The IPSA’s gain was the fourth-strongest in Latin America, behind Argentina’s Merval (+2.6%), Colombia’s COLCAP (+2.1%), and Peru Select (+1.6%), but ahead of Brazil (+1.3%) and Mexico (+0.7%).

Despite the recovery, the IPSA remains 9.53% below its all-time high of 11,721.38 reached on January 28. The weekly loss of 4.57% and monthly decline of 8.15% underscore the severity of the correction, which was driven by Chile’s unique vulnerability as a near-total petroleum importer. In 2025, the IPSA achieved 72 all-time highs; in 2026, it has yet to record one.

Currency

The peso chileno was relatively steady on Monday, with the dollar opening at CLP 911.83 (−0.03% from the prior close of CLP 912.10). The pair had closed at CLP 914.63 on Monday March 9, meaning the peso was recovering marginally. Weekly, the dollar remains up 3.38% against the peso, though it is still down 6.19% year-over-year.

XTB attributed the dollar’s retreat to a lower geopolitical risk premium as markets digested Trump’s de-escalation signals. Copper prices rebounded from last week’s lows, providing support for the peso, though the metal remains well below its January highs. Analysts project USD/CLP in the 820–880 range by year-end, assuming political stability and sustained copper demand.

The BCCh monetary policy rate (TPM) stands at 4.50%. Chile’s February CPI slowed to its lowest level since 2020, per Bloomberg Línea, which was encouraging before the Iran war disrupted energy markets. The oil crash back to $87.80 reduces the imported inflation risk that had been threatening to derail the BCCh’s easing cycle. However, as Betterplan’s Gré noted, the BCCh must now evaluate whether the energy shock warrants maintaining the current rate or resuming cuts.

Technical Analysis & Chart

The daily chart shows a strong bullish marubozu-like candle, with the open at 10,428.64 matching the session low—a textbook signal of buyers in control from bell to bell. The close at 10,604.52 reclaimed the 10,540 area, which had served as a key support level before the March selloff.

Momentum indicators remain in bearish territory but are turning. The RSI reads 44.72 with its signal at 41.13—both below 50 but rising from deeply oversold conditions. The MACD histogram at −42.04 sits above its signal (−130.91) and trigger (−172.96), with the histogram narrowing toward zero in a nascent bullish configuration. A crossover above zero would confirm trend reversal.

The Bollinger Bands show the index bouncing from near the lower band toward the midline. The 200-day SMA at 9,465.15 sits well below, confirming the secular uptrend remains intact. Key resistance sits at the 10,675–10,766 zone (20- and 50-day SMA cluster), while the all-time high of 11,721.38 is 10.5% above current levels.

The correction from 11,721 to the 10,205 low represents a roughly 13% drawdown, consistent with a major pullback within a structural bull market. The IPSA needs to close above 10,675 to signal the corrective phase is ending; failure there would suggest continued consolidation in the 10,200–10,675 range.

Key Levels

Global Context

Monday’s session was dominated by the historic oil price reversal. Brent crude underwent a roughly $30 swing, peaking near $120 before crashing to $87.80—the largest single-day drop since 2022. The catalyst was de-escalatory signals from Washington: Trump called the Iran war “very complete,” and Energy Secretary Wright’s false (and deleted) claim about a Navy tanker escort triggered a 17% intraday plunge. City Index analyst Fawad Razaqzada invoked the “TACO strategy” (Trump Always Chickens Out), noting traders are applying the same logic that worked during the tariff threats.

Wall Street finished mixed: the S&P 500 slipped 0.21%, while Europe rallied strongly (Euro Stoxx 50 +2.7%, FTSE 100 +1.6%) and Asia recovered (Nikkei +2.9%, Hang Seng +2.2%). Gold surged 2.44% to $5,228.40 on dollar weakness. The VIX eased to 24.93.

For Chile, the oil crash is unambiguously positive. As a near-total petroleum importer with an economy that contracted in January, lower oil prices ease inflationary pressure, reduce the current account deficit, and improve the case for BCCh rate cuts. The EIA forecasts Brent above $95 for the next two months before declining below $80 in Q3 if the conflict de-escalates—a trajectory that would be constructive for Chilean macro fundamentals.

Looking Ahead

Today (March 11): U.S. CPI data for February. A hot print would delay Fed rate cuts, strengthen the dollar, and pressure copper and the peso. Chile’s own February CPI showed the slowest inflation since 2020, but the Iran war’s impact on energy prices may not appear until March data.

This week: U.S. jobless claims (March 12), GDP and UMich inflation expectations (March 13). Copper price direction remains the single most important variable for the IPSA and the peso, as it determines both export revenues and investor sentiment toward Chile.

March 18: The Federal Reserve rate decision. Rates are expected to hold at 3.50–3.75%, but the dot plot and statement language on oil-driven inflation will shape emerging-market rate expectations. Any hawkish surprise would pressure the peso and delay potential BCCh easing.

Structural factors: Analysts project USD/CLP in the 820–880 range by year-end, supported by Chile’s rightward political shift, growing investment confidence, and sustained copper demand. The IPSA’s 72 all-time highs in 2025 underscore the structural bull case; the current correction represents an opportunity for investors with conviction in the medium-term thesis.

Verdict

Chile is the clearest beneficiary of the oil price crash among LatAm economies. Unlike Colombia and Argentina, which produce crude, and Mexico, where Pemex revenues depend on high prices, Chile imports virtually all its petroleum. Monday’s 1.69% IPSA gain was solid but actually understated the relief: Latam Airlines’ 7% surge was the market’s way of repricing the single biggest cost variable for Chile’s largest-cap airline from crisis to manageable in one session.

The technical picture is improving but not yet decisive. The IPSA remains below its key moving averages and 9.5% from its all-time high. The RSI at 44.72 is turning higher but hasn’t crossed the 50 midline. The correction from 11,721 to 10,205 was driven by Chile’s unique oil import vulnerability; the reversal in oil prices directly addresses that vulnerability, but the market needs to see sustained sub-$90 Brent before fully repricing.

Bias: Cautiously bullish. Chile stands to gain the most if oil normalizes, copper holds, and the BCCh resumes easing. The IPSA needs to clear 10,675 (SMA cluster) to confirm the recovery. Below 10,538, the correction resumes. U.S. CPI today is the immediate risk; copper remains the medium-term driver. Year-end target range of 820–880 for USD/CLP supports a constructive peso view.

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