Copper Stocks Hurt As Worries Continue In Peru
As election results were tallied, Ollanta Humala was the reported winner with 52.6% of the vote. Humala is known as a left-wing nationalist that may bring the country the way of Hugo Chavez. The stock market in Peru collapsed 14% on these results as fears of nationalization spread quickly. Stocks all over the world with ties to Peru also collapsed. Precious metals miner Compania de Minas Buenaventura SA (NYSE:BVN) dropped from $42.00 to $35.75 and copper producer Southern Copper Corporation (NYSE:SCCO) fell 10% on this news.
In the short term these stocks will most likely remain under significant pressure until more clarification can be gained. While their valuation seems attractive, if nationalization does become a reality, they will go much lower.