Chile stocks, peso fall in wake of global rout

(Updates with peso close)

SANTIAGO, March 30 (Reuters) - Chile's peso closed down nearly 2 percent while blue-chip stocks retreated heavily in midafternoon trade on Monday, tracking Wall Street and regional markets.

The peso closed 1.93 percent weaker at 584.00/584.50 per dollar, compared to Friday's close at 572.70/573.20, which was the highest level since early October.

"Once again the effects of the crisis are being felt, with worries about global market stability given the situation facing the (U.S.) automotive sector," said one currency dealer, asking not be be named in line with policy.

Major U.S. indexes fell on Monday after the Obama administration raised the specter of bankruptcy for U.S. automakers General Motors (GM.N) and Chrysler. Sentiment was also pressured after Spain had to rescue a regional bank, adding to concerns about the global financial system.

Chile's blue chip IPSA share index .IPSA tracked other regional markets, falling 2.06 percent to 2,495 points, while the all-market IGPA index .IGPA was down 1.65 percent at 11,900 points.

"The whole issue of the United States (auto industry) and the state of Europe and Asia are weighing in," said Roberto Guzman, head of investments at the FIT Research brokerage in Santiago.

"They are dragging down the markets, although Chile is falling to a lesser extent, which goes hand in hand with lower trade volumes."

Chilean stocks were led lower by resource companies, with copper manufacturing company Madeco MAD.SN falling 34.1 percent to 28.10 pesos per share after the company announced the end of a dividend option.

Stock in Soquimich SQM_pb.SN, Chile's leading exporter of fertilizer and the world's biggest producer of iodine and lithium, fell 4.87 percent to 15,480 pesos per share.

Shares of forestry and paper company CMPC CAR.SN, which last week placed around $364 million in local bonds, were down 3.2 percent, and CAP CAP.SN, Chile's largest steel and iron ore producer, tumbled 3.2 percent.

Chile's largest banks, Santander Chile STG.SN and Banco de Chile CHI.SN, were down 0.86 percent and 0.52 percent respectively. (Reporting by Froilan Romero and Manuel Farias; writing by Alexia Vlahos; Editing by Leslie Adler)