Chile peso falls on dollar, earnings lift stocks

SANTIAGO, May 2 (Reuters) - Chile's peso CHILJ <CLP=CL> closed weaker on Friday in the face of broad dollar strength, while shares ended slightly firmer on the back of quarterly earnings reports issued this week, traders said.

The peso weakened 0.6 percent to 465.00/465.50 pesos per dollar, compared with Wednesday's close at 462.00/462.50. Chilean markets were shut on Thursday for Labor Day.

It was a new two-month intraday low, after a modest Federal Reserve rate cut this week and a batch of economic data reinforced expectations U.S. interest rates will be kept on hold for a while.

The central bank bought $50 million worth of dollars for a 14th day on the foreign exchange market on Friday as part of its $8 billion currency intervention program aimed at curbing the strength of the domestic currency.

The central bank announced its intervention program on April 10 after the peso firmed up to 15 percent against the dollar in the year to date. The peso is now up 7.05 percent against the U.S. currency so far this year.

Stock indexes ended slightly higher, but off the day's highs, buoyed by a batch of quarterly earnings released earlier this week.

On the bourse, the all-market IGPA index .IGPA advanced 0.26 percent to 14,020.63 points, while the blue-chip IPSA .IPSA rose 0.28 percent to 2,997.83 points.

"The bourse is up playing catch-up after U.S. markets rose very strongly yesterday," said Andres Roman of BICE Brokerage.

Shares in Banco Santander Chile STG.SN, Chile's biggest financial institution, rose 3.48 percent to 23.80 pesos a share, while shares in its rival Banco de Chile CHI.SN gained 0.94 percent to 39.60 pesos a share.