Chile Stocks Slip 0.51% as Falabella Tumbles 4% and Copper Pulls Back

Thursday’s session opened near the prior close at 10,864.48 before sellers took control early, pushing the index to a session low of 10,695.09 — a level not seen since early January. The recovery into the close to 10,811.96 trimmed losses but could not prevent a third straight red day, extending the pullback from the January 28 all-time high of 11,721.38.

This is part of The Rio Times’ daily coverage of Chilean markets and Latin American financial news.

For context on regional markets, see Brazil’s Ibovespa for the same session.

Also tracking regional peers: Colombia’s COLCAP closed the same session.

Retail was the clear laggard. Falabella tumbled 4.03%, its worst session of the month, despite having announced a historic US$900 million capital expenditure plan for 2026 — a 40% increase over 2025 focused on store renovations and mall expansions. Embotelladora Andina B fell 2.66% and Hites dropped 3.47%, reflecting broader consumer discretionary weakness.

Commodity-linked names also suffered. CAP slid 3.69%, Copec fell 1.80%, and SQM-B declined 1.44% as copper prices retreated 1.5% and global risk aversion weighed on materials. The property sector bucked the trend: Parque Arauco surged 3.81% and Mall Plaza gained 2.96%, while Vapores advanced 1.90%. Among banks, BCI rose 1.32% and Banco Santander added 0.95%, suggesting domestic-facing financials found some support.

The Telefónica Chile sale process continues to develop. Millicom International, controlled by French telecom entrepreneur Xavier Niel, has emerged as the frontrunner to acquire the operations, displacing the earlier Entel–América Móvil consortium. Wom has also submitted competitive offers. The transaction’s resolution could reshape Chile’s telecom landscape.

The peso weakened for a second consecutive session, with the dollar closing at CLP 865.15 (+0.24%) after opening at CLP 864.70. The session range was CLP 861.58 to CLP 868.48, reflecting the tug-of-war between a firming DXY and the peso’s structural supports. Despite the daily weakness, the peso remains approximately 8.9% stronger year-over-year against the dollar.

Copper’s 1.5% decline to US$5.73/lb on the Comex was the primary headwind for the currency. The red metal has pulled back from its January highs above US$6.00/lb, though remains elevated by historical standards. Chile’s terms of trade remain favorable: Cochilco raised its 2026 average copper price forecast to US$4.95/lb, and January copper exports of US$4,546 million were up 7.9% year-over-year.

The BCCh has held the TPM at 4.50% since its 25bp cut in December. The January CPI came in at 0.4% monthly and 2.8% annually — the first reading below the 3% target since February 2021 and well within the tolerance band. The Grupo de Política Monetaria recommended holding rates at the January meeting, citing the need for caution given external risks despite the faster-than-expected inflation convergence.

Growth expectations have improved. Consensus has lifted 2026 GDP forecasts to 2.5% (from 2.0%), supported by dynamic investment — particularly in mining and energy mega-projects — and the December IPoM projects 4.9% growth in fixed capital formation. Unemployment remains a concern at 8.4%, above pre-pandemic levels, though the consumer confidence trend is improving.

The daily chart reveals a deteriorating short-term picture. Thursday’s candle shows a wide range (10,695–10,871) with a close near the midpoint at 10,812, suggesting indecision after the deep intraday probe. The IPSA remains well above its rising 200-day SMA at 9,306.77 — a 16% cushion — confirming that the primary uptrend remains intact despite the correction.

The Bollinger Bands show the index trading near the lower band around 10,687, with the upper band at 10,980.86. The ascending orange moving average (likely the 50-day EMA near 10,810–10,916) has flattened and is now being tested as support. A decisive break below 10,687 would open the path toward 10,400–10,500.

Momentum indicators are flashing caution. The RSI reads 50.67/39.40, with the slower signal already in oversold territory below 40 while the faster line hovers at neutral. The MACD histogram at −90.17 is deep in negative territory, with signal lines at 49.96/−40.21 showing bearish divergence that has been building since the January peak. A MACD bullish crossover would require several sessions of sustained buying.

Wall Street closed modestly lower on Thursday, with the S&P 500 dropping 0.28% to 6,861.89, the Dow slipping 0.54%, and the Nasdaq declining 0.31%. US weekly jobless claims fell to 206,000 — well below the 225,000 expected — reinforcing the narrative of a resilient labor market that may keep the Fed on hold longer than markets anticipate.

Oil markets held recent gains as US–Iran tensions kept the geopolitical risk premium elevated, with WTI at US$65.44 (+0.4%) and Brent at US$70.58 (+0.3%). Gold extended its rally above US$5,015 (+2.2%), while the DXY gained 0.19% to 97.89, marking its fourth straight session of strength.

Copper’s retreat is the primary concern for Chile. The metal fell 1.5% to US$5.73/lb amid dollar strength and reduced risk appetite. However, the structural outlook remains supportive: Cochilco projects a moderate deficit of 238,000 tonnes in refined copper for 2026, Chilean production continues to lag (declining year-over-year in each of the last five months of 2025), and January copper exports hit US$4,546 million (+7.9% y/y).

Friday’s US PCE inflation report and Q4 GDP release will set the tone for global risk appetite heading into the weekend. A hot PCE reading would reinforce the hawkish Fed narrative and pressure emerging-market currencies further, potentially pushing the peso back toward the CLP 870 level. A softer print could relieve some of the pressure that has built during the DXY’s four-day rally.

The BCCh’s next rate decision will be closely watched. With inflation at 2.8% — firmly below the 3% target — and the GPM recommending a hold at 4.5%, the question is whether external risks (particularly US policy uncertainty and tariff threats) justify continued caution or whether the board will resume its easing cycle.

Chile’s record January trade surplus of US$3,811 million underscores the economy’s external resilience. The 17-month streak of rising trade volumes, led by mining (+12.1%) and industrial exports (+13.9%), supports the peso and provides a buffer against capital flow volatility. The Telefónica Chile sale resolution could provide a catalyst for telecom sector positioning in the coming weeks.

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