Stock exchange “stable” despite falls

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Despite two days in a row with the Lima Stock Exchange dropping, central reserve bank president Julio Velarde told press that it is not overvalued, taking into account current metals prices, calling it the least vulnerable in South America when faced with external unbalancing factors.

“If you look at the Peruvian exchange alongside other emerging markets, you can see that it has been considerably more stable due to the solid macroeconomics in the country and a credible central bank,” he said yesterday to the Andina agency.

The official said that the Lima exchange was no overvalued, but admitted that there is a risk if it keeps on growing so fast or if the price of zinc falls.

He made clear that the recent drop was the result of nervousness on the part of brokers due to external events, pointing out that the Lima Stock Exchange has proved less volatile than other markets in the region and has not suffered a substantial impact.

Yesterday the General Index, most representative of the exchange as a whole, dropped by 0.83% while the selective index of the 15 most traded shares (ISEL) fell 1.06%. Sources at Scotiabank suggest that the market may be overbought, particularly in the agricultural and mining sectors.

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