STXNEWS LATAM-Chile stocks up on strong industrial output

Tue Sep 28, 2010 1:25pm EDT

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Chile stocks .IPSA were up 0.3 percent on Tuesday, boosted by strong industrial output data and the prospects of a merger in the local banking sector.

Chile's industrial production rose 6.9 percent in August compared with the same month last year, well above market expectations for a 4.3 percent increase, the government said on Tuesday. For more, see [ID:nN28121779]

"With better-than-expected economic indicators, you can expect pro-cyclical sectors to keep charging," said Sebastian Rauff, a trader with the Scotiabank brokerage in Santiago.

Shares in Chile's fifth-largest bank, Corpbanca COB.SN, jumped after a local business newspaper report of informal merger talks with state-run Banco do Brasil (BBAS3.SA). Corpbanca's stock was up 4.3 percent midday Tuesday after rising 5.4 percent on Monday.

"Corpbanca is one of those companies watched closely by investors and thanks to this news the stock is going to be much more volatile," said Francisco Hazbun, a trader with the Tanner brokerage in Santiago.

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