Chile's benchmark IPSA index fell 0.88% to close at 10,675 on Wednesday, marking a second consecutive session of losses.
The decline reversed a brief period of stability, as the index had posted a third straight day of gains the previous Tuesday, closing 0.11% higher at 10,900.52.
The sharp reversal highlights the fragility of the recent uptrend in Santiago's equity market.
The primary driver of the sell-off was a weakening Chilean peso, which eroded the local-currency value of export-oriented earnings.
This currency headwind proved stronger than the support provided by rising copper prices.
While the industrial metal posted gains in the session, the broader market remained under pressure from global risk-off sentiment, which has been weighing on emerging-market assets.