Chile peso rises amid dollar weakness; stocks fall

SANTIAGO, Oct 21 (Reuters) - Chile's peso advanced to nearly one-month highs on Wednesday, rising on a weakening U.S. dollar, traders said.

However, advancing stocks abroad failed to lift Chile's benchmark IPSA index .IPSA, which closed lower on Wednesday due largely to losses from forestry companies CMPC CAR.SN and Copec COP.SN.

The IPSA dropped 0.61 percent to 3,424.01 points, and the all-market .IGPA was down 0.63 percent to 16,068.80.

"The forestry sector, specifically Copec and CMPC, explain a large part of the losses in the market today," said Rodrigo Andaur, head of research for FIT Corredores de Bolsa. "If you take out those two we'd probably have closed closer to zero or even been positive."

Chilean forestry group CMPC tumbled 2.3 percent to close at 19,339 pesos, while rival Copec, one of the world's biggest wood pulp exporters, fell 2.2 percent to 7,230.10 pesos.

Limiting losses was Chilean retailer La Polar LAP.SN, surging more than 4 percent to close at 2,874.10 pesos while rival Ripley RIP.SN climbed more than 2 percent to 426.60 pesos.

Retail stocks have posted several days of gains as investors anticipate improved third-quarter earnings from Chile's top retailers next week.

Earlier gains on Wall Street and broad dollar weakness helped the peso CLP=CL advance 0.61 percent to 540.30/540.80 per dollar from Tuesday's close of 543.60/543.90.

The peso has gained 18.6 percent against the dollar this year after tumbling 22.3 percent in 2008 during the worst of the financial crisis.