Chile stocks close near two-year highs; peso firms

(Recasts with market close, analyst quote)

By Aaron Nelsen

SANTIAGO, Oct 6 (Reuters) - Chilean stocks closed near two-year highs on Tuesday, spurred by gains in commodities on a weak U.S. dollar and growing optimism over a global economic recovery.

The benchmark IPSA index .IPSA closed 0.79 percent higher at 3,417.66 points after Australia raised interest rates and sparked a positive outlook for the world economy. The all-market IGPA .IGPA climbed 0.61 percent to end at 16,055.57.

Today's close was the highest since October 2007 when it set a lifetime high of 3,512.19.

Still, analysts say the blue-chip IPSA has little upside through the end of the year and could face a correction after surging an outstanding 44 percent this year.

"The conditions and macroeconomic fundamentals are better today than we've seen this year, but not as good as they were three or four years ago," said Rodrigo Andaur, head of research for FIT Research brokerage. "Depending on what happens on international markets, we could see a correction."

A weaker U.S. dollar sparked a rise in basic materials prices, including Chile's chief export of copper, boosting its commodity sector.

Chilean industrial conglomerate Copec COP.SN, one of the world's biggest wood pulp exporters, climbed 2 percent to 7,291.2 pesos.