Chile peso firms against dollar, stocks edge higher

SANTIAGO Aug 27 (Reuters) - Chile's peso rose on Wednesday amid strong dollar sales on the domestic market, while stocks ended slightly firmer but off the day's highs as gains on Wall Street buoyed regional bourses.

The peso CHILJ CLP=CL, which has depreciated strongly since an $8 billion central bank intervention earlier this year, gained 0.52 percent against the dollar to 519.50/520.00 pesos per dollar, versus Tuesday's close at 522.20/522.50 per dollar.

"From the start of the day there were a lot of dollars on offer by pension funds, and the dollar weakened at the same time, leading to a rise in the peso," one trader said.

The peso has depreciated 4.18 percent so far this year against the dollar, after appreciating 6.44 percent in 2007. However, it has depreciated around 17 percent since the central bank intervened in April to sap strength from the currency.

Chile's all-market IGPA stock index .IGPA ended 0.14 percent firmer at 13,785.93 points, while the blue-chip IPSA .IPSA firmed 0.12 percent at 2,897.83 points.

Shares of Chile steel and iron ore producer Cap CAP.SN rose for a second day, up 2.35 percent to 18,600 pesos per share. The company is in a $550 million expansion of its sheet steel operation.

Stock of leading fertilizer exporter Soquimich SQM_pb.SN, also rose for another day, up 2.61 percent at 20,485 pesos per share.

However retailers were weaker, with D&S DIS.SN, owner of Chile's biggest supermarket chain, falling 0.32 percent and diversified retailer Cencosud CEN.SN falling 2.37 percent to 1,470 pesos.

Shares in Chile-based regional energy group Enersis ENE.SN (ENI.N) fell 0.46 percent to 179 pesos.

Chile's largest bank, Santander Santiago STG.SN, saw a 1.23 percent rise in its stock price after announcing Jan-July profit of 186.63 billion pesos ($371 million). (Editing by Leslie Adler)