Chile stocks up 1.19 pct, peso extends gains

SANTIAGO Nov 27 (Reuters) - Chile's benchmark IPSA index .IPSA rose 1.19 percent on Friday, rallying from Thursday's losses despite global bourse losses on investors' fears over Dubai debt problems, while the peso firmed.

The blue-chip IPSA opened 0.5 percent lower on global bourse losses, but rallied in afternoon trading to close at 3,222.22 points, boosted by a host of stocks. The all-market .IGPA closed 0.96 percent higher at 15,243.57 points.

"Today's gains are partly due to a rebound from yesterday's losses," said William Baeza, a financial analyst for Euroamerica brokerage. "There have also been very low volumes."

U.S. stocks fell more than 1 percent in a holiday-shortened session on Friday as a possible debt default by a Dubai state-owned conglomerate prompted fresh concerns about the global financial system. [ID:nN27431994]

Dubai has said it would ask creditors of state-owned Dubai World and Nakheel, the builder of its palm-shaped islands, for a standstill agreement as a first step toward restructuring billions of dollars of debt. For details, see [ID:nGEE5AO2FN]

Baeza added that better-than-expected third-quarter results from Chilean industrial conglomerate Copec, the most heavily weighted stock on the local exchange, and forestry group CMPC helped fuel a rebound in the commodity sector.

Copec COP.SN climbed 2.37 percent to 7,125 pesos per share, while CMPC CAR.SN, closed 2.26 percent higher to 18,300 pesos per share.

Chile steel and iron ore producer CAP CAP.SN, surged 2.89 percent to 13,400 pesos per share.

Earlier in the day Chile's peso CLP=CL rose slightly, reversing early losses on increased dollar availability in the local currency market. The peso advanced 0.26 percent to close at 493.00/493.50 per dollar compared to Thursday's close of 494.30/494.80.

The peso briefly weakened to 500 pesos on broad gains in the U.S. currency as global investors cut their exposure to riskier assets on concerns over Dubai's debt woes, traders said.

The peso has been one of the best-performing emerging market currencies, rallying around 30 percent against the dollar so far this year -- which has prompted central bank warnings of possible intervention. (Reporting by Maria Jose Latorre and Aaron Nelsen; Editing by Chizu Nomiyama) ((aaron.nelsen@thomsonretuers.com; Tel+562-370-4252))