Chile peso closes at 9-month low, stocks fall

SANTIAGO, June 27 (Reuters) - Chile's peso fell for a seventh straight session against the dollar on Friday, on record oil prices and rising demand for dollars by foreign banks, while stocks slumped in line with global markets.

The Chilean peso CLP=CL fell 1.52 percent to close at 521.20/521.50 per dollar on Friday, hitting a nine-month low against the greenback and pushing the peso's depreciation to 4.49 percent for the year to date.

"The demand for dollars by foreign brokers continues to be strong. At the same time, there's uncertainty about the U.S. financial crisis, which has hurt the outlook for stock markets," one trader said.

The central bank continued its daily dollar purchases of $50 million on the currency exchange as part of an $8 billion intervention begun in April to curb the strength of the peso after the dollar fell to 430 pesos in March.

The peso has depreciated nearly 17 percent compared with its level before the announced intervention.

"On top of all of that, oil prices are up again, which is a constant worry for the global economy, and one of the main factors behind the slump on world bourses," the trader added.

On the Santiago Stock Exchange the all-market IGPA index .IGPA fell 1.20 percent to 14,629 points, while the blue-chip IPSA index .IPSA retreated 1.54 percent to 2,996 points.

Declining blue-chip issues outnumbered advances by 6 to 1 in afternoon trade, led by the heavily weighted electric utility and raw materials sectors.

Leading electricity generators Endesa Chile END.SN and Colbun COL.SN fell 2.3 percent and 1.52 percent, respectively.

Steelmaker and iron ore exporter CAP CAP.SN led blue-chip percentage losses with a slide of 5.29 percent to 23,202 pesos a share. At the end of last week, CAP shares had gained 50 percent for the month.

Wood pulp producers also fell, with industrial conglomerate Copec COP.SN dipping 1.23 percent and wood panel manufacturer Masisa MSS.SN down 2.14 percent. (Reporting by Froilan Romero; Writing by Lisa Yulkowski; Editing by Jonathan Oatis)