Chile peso falls after govt bond news, stocks slip

SANTIAGO, May 7 (Reuters) - Chile's peso fell to a three-month low on Wednesday, as the dollar advanced in global markets and after the finance ministry announced it would issue an additional $800 million in local peso bonds.

Chilean stock indexes slipped in afternoon trade after oil prices spiked above $123 a barrel.

The Chilean peso CHILJ <CLP=CL> closed 0.85 percent lower at 470.50/470.80 per dollar compared with Tuesday's close at 466.50/467.00.

"The dollar's global gain is the main factor behind the peso's fall today, but the debt issue announcement also had an effect, even though it was somewhat expected," a trader said.

The finance ministry announced a $800 million bond issue on Wednesday and said the proceeds would be used to buy dollars and to increase the reserves at the central bank, which has been buying $50 million worth of dollars a day as part of an $8 billion currency intervention program.

The peso, which prior to the intervention had appreciated by about 15 percent against the dollar, has since pared its gain for the year to about 6 percent.

On the stock exchange, the all-market IGPA index .IGPA retreated 0.78 percent to 13,774 points, while the blue-chip IPSA index .IPSA fell 1.07 percent to 2,925 points.

Equities analyst Carlos Lagos with the BCI brokerage said weaker March economic growth figures on top of uninspiring first quarter corporate earnings and spiking oil prices were not favoring local stock prices.

"With oil prices rising, profit margins will deteriorate. Oil prices definitely have an effect on the local market," Lagos said.