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Chile stocks wilt with Wall Street, peso falls

Thu May 8, 2008 2:16am IST
 
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SANTIAGO, May 7 (Reuters) - Chilean stock indexes closed lower on Wednesday, as U.S. financial stocks slumped and oil prices jumped above $123 a barrel.

Chile's peso fell to a three-month low, as the dollar advanced in global markets and after the government announced a new $800 million peso bonds issue.

The all-market IGPA index .IGPA retreated 0.88 percent to 13,760.90 points, while the blue-chip IPSA index .IPSA fell 1.16 percent to 2,922.92 points.

Stocks fell in line with regional markets as oil spiked to new highs and financial stocks took a beating after the U.S. Securities and Exchange Commission said it was scrutinizing secured funding activities of investment banks.

"I think today we've been pulled lower by what's happening in U.S. markets. Once again there's noise about the financial sector," said Rodrigo Andaur, an analyst with FIT Research in Santiago. "Right after announcements that the worst is behind us, there's news that it's not quite over yet."

"Oil prices are another problem," Andaur added. "There hasn't been much good news today."

Chile imports nearly all of the fuel it consumes, and growth potential has been hampered by high energy prices and short supplies amid cuts in natural gas supplies from Argentina and lower hydroelectric reservoir levels due to scant rainfall.

Losses were led by wood pulp heavy weights, with Copec COP.SN down 1.65 percent and CMPC CAR.SN falling 1.79 percent.  Continued...

 
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