Chile stocks fall with world markets, peso down

(Updates with peso close)

By Alexia Vlahos

SANTIAGO, June 15 (Reuters) - Chile's leading share index fell sharply on Monday, tracking losses on foreign markets, as investors took profits after gains that last week propelled the bourse to its highest level since December 2007, traders said.

In currency trading, the peso fell as the U.S. dollar rose.

The blue-chip IPSA index .IPSA fell 1.46 percent to 3,205 points, while the all-market IGPA index .IGPA was down 1.21 percent at 15,261 points.

"All stock markets in Europe and the U.S. are falling a lot today," said Pamela Auszenker, head of research at the Bci brokerage. "Commodities have been falling hard globally, and that obviously impacts Chile."

Copper for July delivery fell 3.7 percent in New York to $2.285 per pound.

Wall Street's Dow Jones industrial average .DJI fell more than 2 percent as natural resource shares weakened and regional manufacturing data dented optimism over the economy's health.

The IPSA, which is up around 35 percent year-to-date, rose around 16 percent in May, when it posted its biggest gain in a single month since January 1994.

Soquimich SQM_pb.SN, Chile's leading exporter of fertilizer and one of the world's biggest producers of iodine and lithium, fell 3.72 percent to 20,800 pesos, while shares in Steelmaker CAP CAP.SN fell 4.07 percent to 14,380 pesos a share.

Chile's leading airline LAN LAN.SN fell 0.34 percent to 6,650 pesos.

Cencosud CEN.SN, one of Latin America's largest retailers, fell 2.85 percent to 1,415 pesos, while retailer La Polar LAP.SN fell 2.24 percent to 2,152 pesos a share.

Regional energy group Enersis ENE.SN fell 0.38 percent to 193 pesos a share, while electricity generator Endesa Chile END.SN rose 1.39 percent to 859 pesos.

Chile's peso CLP=CL closed 0.57 percent weaker at 565.20/565.50 per dollar compared with Friday's close of 562.00/562.30.

"Markets in general are negative, with a fall in global bourses dragging down emerging markets, while the dollar has strengthened significantly against the euro," said one currency dealer.

The peso is up 13.4 percent against the dollar year-to-date after slumping 22.3 percent in 2008. (Additional reporting by Froilan Romero and Manuel Farias; Editing by Kenneth Barry)