Chile peso firms; stocks slip, led by transport sector

SANTIAGO, May 6 (Reuters) - Chile's peso advanced against the dollar on Tuesday as the central bank continued buying dollars to curb the strength of the Chilean currency, pulling the greenback down from a two-month high.

Chilean stocks fell in afternoon trade, led by the transport sector, after oil prices touched record highs.

The Chilean peso CHILJ <CLP=CL> closed 0.43 percent higher at 466.50/467.00 per dollar compared with Monday's close at 468.50/469.00.

"The peso's rise is a correction due to profit-taking after the dollar's recent gains," a broker said. "The market seems confused about what the dollar's equilibrium price should be, which makes the exchange rate volatile."

Chile's central bank bought $50 million worth of dollars on Tuesday, a continuation of the daily purchases begun on April 14 as part of an $8 billion currency intervention program.

The peso, which had appreciated by about 15 percent against the dollar since the beginning of the year, has seen its gain fall to about 6.7 percent.

On the stock exchange, the all-market IGPA index .IGPA slipped 0.53 percent to 13,894 points, while the blue-chip IPSA index .IPSA fell 0.63 percent to 2,961 points.

"On the local market, attention is on international markets and the dollar. Given the dollar's recent gains and possible weakening if the U.S. growth outlook deteriorates, we expect a volatile exchange rate in coming days," said Christian Gardeweg, an economist with the Celfin brokerage.

Gardeweg said that, although global growth expectations were relatively high, there were signs of deceleration in the U.S. economy amid record high oil prices and international inflation.