Chile peso, stocks end down as economy shrinks

(Updates with stock market close, fresh quote)

By Froilan Romero

SANTIAGO, April 6 (Reuters) - Chile's peso closed weaker on Monday, dragged down by losses on global stock markets and worse-than-expected data that showed an economic contraction in February, which also dented share prices, traders said.

The peso closed 0.5 percent weaker at 581.40/581.90 per dollar, compared to Friday's close at 578.30/578.80. The peso has appreciated 10.2 percent so far this year, after depreciating 22.3 percent in 2008.

"Once again, fears the economic global crisis is getting worse dragged stock markets into negative territory," said one currency dealer, asking not to be named in line with policy.

"Also, local economic growth data had a negative impact on the peso, which ... was worse than expected and resulted in an increase in demand for dollars by investors and some banks which closed positions," he added.

Chile's IMACEC economic activity index fell 3.9 percent in February compared with a year earlier, its biggest fall since May 1999 and the fourth consecutive monthly drop amid a global crisis, central bank figures showed on Monday.

The data also hit the stock market, which saw near across-the-board losses.

The blue-chip IPSA leading share index .IPSA fell 0.24 percent to close at 2,545.05 points after firming 0.62 percent on Friday, preliminary closing data showed. The all-share IGPA index .IGPA fell 0.15 percent to 12,148.19 points.