Chile peso extends gains; stocks tread water

By Aaron Nelsen

SANTIAGO, Sept 22 (Reuters) - Chile's markets rose on Tuesday, with the peso gaining for the seventh day in eight as copper prices rose amid a weakening dollar in global markets.

Stocks were slightly higher in early afternoon trading, lifted by telecommunications shares.

The peso CLP=CL closed Tuesday's session 0.15 percent higher at 541.00/541.50 per dollar compared to Monday's close of 541.80/542.30. The peso has strengthened 18.4 percent against the dollar so far this year after slumping 22.3 percent in 2008.

Chile's currency is heavily influenced by the spot price of copper MCU0, which rose 2.6 percent on the London Metals Exchange on Tuesday.

The benchmark IPSA stock index .IPSA seesawed for most of the session and was flat at 3295.85. The all-market IGPA .IGPA was up 0.04 percent higher at 15,538.20 points.

"On global bourses there continues to be a lingering aversion to risk," said Agustin Alvarez, head of research for BICE Inversiones brokerage. "There is a lot of liquidity because the interest rates are very low and people are gradually making riskier investments."

Entel ENT.SN, one of Chile's leading mobile phone operators, rose 1.5 percent to 7,085 pesos.

CCU (CCU.SN), Chile's largest brewer, climbed 0.9 percent to 3,710 pesos per share in afternoon trading.

Shares of Soquimich SQM_pb.SN, Chile's leading exporter of fertilizer and the world's biggest producer of iodine and lithium, was trading 0.27 percent higher to 21,270 pesos per share.

Copec COP.SN, the country's largest industrial conglomerate, was down 0.78 percent to 6920 pesos.