Chile stocks rise following global markets, peso up

(Adds closing stock prices, analyst quote)

By Manuel Farias and Froilan Romero

SANTIAGO, March 4 (Reuters) - Chile stocks rose and the peso currency strengthened on Wednesday, shadowing global markets encouraged by prospects for more stimulus spending by China as a sign the Asian giant's economy may be recovering.

The blue-chip IPSA index .IPSA closed 1.42 percent higher, at 2,435.74 points after trading higher earlier in the day, and the all-market IGPA index .IGPA closed up 1.0 percent at 11,736.47 points.

Chile rose less than other regional markets, held back by losses at one of its largest companies, Soquimich SQM_pb.SN.

"We spent the whole day following markets abroad," said one trader. "We rose to a lesser extent due to falling issues like Soquimich, which weigh heavily on the index."

Percentage gainers on the Chilean bourse included those related to raw materials and energy, which would benefit quickly from a return in consumer demand in China.

Industrial conglomerate Copec COP.SN, weighted at about 13 percent of the blue-chip IPSA index, rose 1.16 percent and Chile's biggest steel and iron ore producer, CAP CAP.SN, also one of the most heavily weighted companies on the Santiago bourse, closed 5.33 percent higher at 8,289 pesos per share.

Regional energy group Enersis ENE.SN rose 1.4 percent and electricity generator Endesa Chile END.SN closed up 3.79 percent after steep losses earlier in the week.

Chile's leading carrier, LAN Airlines LAN.SN, rose 4.46 percent on the day.

One of the big losers on the bourse was Soquimich SQM_pb.SN, Chile's chief fertilizer exporter and the world's largest producer of iodine and lithium, which fell 2 percent after strong rises earlier in the day.

"The fall in SQM was because an international competitor cut its prices, which will have a negative impact on SQM," the trader said.

The Chilean peso ended a three-day losing streak, helped by higher copper prices and dollar sales by banks taking profits.

The peso CLP=CL closed 1.32 percent higher at 607.50/608.00 per dollar, compared with Tuesday's close at 615.50/616.00, when the local currency weakened 1.59 percent.

The peso is up around 5 percent against the dollar so far this year after depreciating 22.3 percent in 2008 on the heels of a currency intervention. (Writing by Pav Jordan; Editing by Kenneth Barry)