IPSA Surges 2.03% on Kast Reform Optimism

01 Market Snapshot

02 Equities — New All-Time High on Kast Premium

The IPSA Chile today posted a commanding 2.03% gain to close at 10,856.29, setting a fresh all-time high in a session defined by relentless buying from open to close. This is part of The Rio Times’ daily coverage of the Chilean stock market and Latin American financial markets.

The session’s price action was remarkably bullish: the index opened at 10,640.08 — which also marked the session low — and climbed throughout the day to close at the high of 10,856.29. This is a “marubozu” candle in technical terms, indicating no selling pressure at any point during the session. The previous all-time high of 10,481 from December 2025 has been decisively eclipsed, with the IPSA now up over 60% on a 12-month basis.

Mining, financials, and energy led the advance. SQM and Antofagasta Minerals benefit from the Kast administration’s pro-private-sector mining stance, while LATAM Airlines, Falabella, and Sigdo Koppers represent the conglomerate backbone of the Chilean market. Morgan Stanley recently raised its IPSA price target to 10,900 for mid-2026 — a level the index reached a session early.

03 Inflation & Monetary Policy

Chile’s inflation fell to 2.4% in February — now below the Central Bank’s 3% target and the lowest since August 2020. The disinflation has been faster than the Central Bank anticipated, driven by peso appreciation, trade diversion effects on imported goods, and atypical declines in food prices. Core inflation at 3.3% in December has also been trending lower. The Central Bank held rates at 4.5% in January, but the below-target inflation reading opens space for further cuts in the first half of 2026.

However, the Iran conflict is complicating the outlook. The Central Bank’s latest monetary policy report warns that higher international fuel prices will cause a significant inflation increase in the second quarter, potentially reversing the disinflationary trend. The government’s mid-March fiscal spending adjustment adds another layer of uncertainty. Two-year inflation expectations remain anchored at 3%, but the energy price shock is the key near-term risk to the rate path.

04 Technical Analysis — IPSA Daily

The IPSA is trading at 10,856.29, breaking decisively above its previous all-time high and entering uncharted territory. The index is well above all key moving averages: the 50-day sits near 10,540, the cluster of intermediate MAs is in the 10,427–10,489 zone, and the 200-day moving average near 9,644 is far below, confirming the secular uptrend. The Bollinger Bands show the index pressing against the upper band at 10,857 — a close at this level suggests the band will expand to accommodate further upside.

The MACD at 58.24 is positive but the histogram is showing slight deceleration at −53.06, a normal signal during a consolidation-breakout sequence. The RSI at 59.83 is bullish and rising but with ample room before reaching overbought territory at 70. A secondary momentum oscillator at 44.73 is neutral, suggesting the rally has further room to run before exhaustion. The key observation: the close at the session high in a marubozu candle is one of the strongest bullish signals in candlestick analysis.

05 Key Levels

06 News in Focus

Kast’s Mining Reset and the US Critical Minerals Deal

President Kast signed a critical minerals cooperation memorandum with the United States on his first full day in office, March 11. The agreement covers copper and lithium and pulls Chile firmly into Washington’s supply chain security framework — a sharp reversal from the Boric administration’s tilt toward state control and Chinese engagement. Kast consolidated the economy and mining portfolios under a single minister, Daniel Mas, signaling that growth, permitting, and mining policy will be coordinated. Chile’s $105 billion mining investment pipeline through 2034 faces a permitting bottleneck requiring over 500 approvals, and copper production actually fell 2% in 2025. Kast has pledged to streamline the process.

Economic Contraction Clouds the Rally

Chile’s Imacec economic activity index contracted 0.3% in February — the second consecutive monthly decline and the first back-to-back contractions since April–May 2023. The reading was outside every published forecast range. Industrial production has now contracted for five consecutive months, and the non-mining Imacec also fell 0.3%, confirming weakness beyond the copper sector. Kast’s official 2026 GDP growth estimate of 2.4% looks increasingly ambitious given the first-quarter trajectory. The OECD forecasts 2.2% growth, while the Central Bank warns that the Iran conflict and fiscal adjustments could weigh further on activity.

Codelco-SQM Lithium Joint Venture Advances

The NovaAndino joint venture between state copper giant Codelco and lithium producer SQM — cleared by China’s antitrust regulator in November 2025 — is advancing. The deal allows lithium extraction from the Atacama salt flat until 2060 and is a pillar of Chile’s strategy to double lithium production by 2031. Kast has pledged to respect existing contracts while favoring greater private-sector participation. Ten decrees are in process before the Comptroller’s Office to enable additional lithium projects in northern Chile. The $105 billion mining pipeline includes copper, lithium, and a new 14-mineral critical minerals strategy covering rare earths and cobalt.

Fiscal Consolidation Under Kast

Kast has proposed US$6 billion in spending cuts within 18 months — equivalent to 1.9% of GDP — through eliminating misuse of public resources, improving state efficiency, and general austerity. The 2026 budget aims to comply with Chile‘s fiscal responsibility rule, though the IMF has cautioned that it relies on optimistic revenue assumptions. Chile’s gross public debt remains moderate, and the country retains its investment-grade credit rating. However, a fragmented parliament with a divided Congress and a tied Senate means legislative deadlocks are likely to constrain Kast’s more ambitious fiscal proposals.

07 Global Context

Chile’s rally is powered by an unusual alignment of favorable factors: a pro-business president, below-target inflation, elevated copper prices near $4.70 per pound driven by AI and energy transition demand, and a US critical minerals partnership. But risks are accumulating. The Iran conflict is pushing Brent above $92 and threatening to reverse the disinflation trend through higher fuel import costs. China, the destination for approximately 39% of Chilean exports, continues to decelerate gradually. The direct impact of US 10% tariffs on Chilean imports is limited — there are exemptions on primary copper and wood exports — but the broader trade uncertainty weighs on global metals demand. Chile’s membership in the CPTPP trade bloc provides some diversification, but the copper-China dependency remains the dominant external risk.

08 Looking Ahead

The IPSA closed at its all-time high on Tuesday, and the immediate question is whether the index can extend into uncharted territory above 10,900 — Morgan Stanley’s mid-2026 target — or whether the overbought upper Bollinger Band at 10,857 triggers consolidation. The bullish marubozu candle argues for follow-through, but the MACD histogram is showing early deceleration.

Catalysts to watch: the next Central Bank rate decision, where below-target inflation supports further easing; the March Imacec print, which will determine whether the economy is in a genuine soft patch or something worse; Kast’s first budget proposals and whether Congress allows his $6 billion spending cut plan; and the trajectory of copper prices as the Iran conflict and Chinese demand dynamics evolve. JPMorgan recently downgraded Chilean equities to Neutral from Overweight, suggesting the “Kast premium” may be largely priced in — a contrarian warning that the market will need fundamental earnings delivery, not just policy optimism, to sustain new highs.

This report was published by The Rio Times. For daily coverage of Latin American markets, read our Latin American Pulse and Brazil Morning Call.

Key Facts

— Deep Dive

— For the complete picture, read our in-depth guide: Latin America Stock Markets 2026: Ibovespa, Merval, COLCAP, IPSA and IPC Guide

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