Investors bearish as Lima Stock Exchange drops over 2%

The Lima Stock Exchange (BVL) closed today with negative indicators, as investors cashed in the gains they have made in a climate of increasing share values.

The General Index (IGRA or IGBVL), most representative of the market as a whole, dropped 2.38% to 20,741 points, while the Selective Index (ISEL or ISBVL), composed of the 15 most traded stocks, dropped 2.80% to 36,301.

2,052 operations totaled 55.4 million soles or $17.5 million traded.

Among the shares that lost most value today were Agroindustrial Pucalá (-12.97%), Aceros Arequipa (-6.25%), newspaper El Comercio (-6.25%), Hidrandina (-6.17%), Cerro Verde (-5.84%) and Peru Cooper (5.76%).

Analyst Jose Menor suggested that the drop is due to investors selling after over-buying in recent months, as reflected in the strong tendency of the market to gain value in session after session. Some now fear that the market has reached a peak, and are trying to sell out in advance of a forecast drop over days and weeks to come.

In any event, the analyst said that such short term fluctuations are common in markets like the BVL, and that reductions are unlikely to last beyond the first week in June.

What is more, he pointed out that some mineral stocks may even be undervalued in view of stable metals prices on the world market, so parts of the market may buck any downward trend.

In the rest of the region, markets closed today with increases, so it seems that this drop is a local phenomenon. The New York exchanges were closed for Memorial Day.

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