RPT-UPDATE 2-Chile peso down more than 2 pct on global fears

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SANTIAGO, March 20 (Reuters) - Chile's peso tumbled more than 2 percent on Thursday, the biggest drop in at least five years, amid fears of a spreading U.S. credit crisis and lower prices for copper, Chile's leading export.

The currency CHILJ <CLP=CL> fell 2.42 percent to end the session at 449.40/449.70 per dollar, compared to Wednesday's close at 438.50/438.80, paring the peso's gain for the year to just under 10 percent.

The drop shadowed a decline in other emerging market currencies and commodities.

European stocks traded lower on Thursday as a profit warning from Credit Suisse fueled worries that the U.S. credit crisis was spreading. U.S. stocks were up, however, on easing inflation concerns and on gains in the major mortgage finance companies.

"Markets are becoming increasingly worried that the U.S credit crisis is extending globally, that's what's caused the fall in raw materials, including copper, which is what affects us directly," one currency trader said.

Chile is the world's largest copper supplier and prices for the metal were down 5 percent on global markets on Thursday. High prices for the metal in recent years have fueled Chile's record trade surplus and lent support to the peso.

After the peso hit a 10-year high against the dollar on Tuesday, Chile's Central Bank President Jose De Gregorio told Congress that he would not rule out intervention if speculation were to cause further appreciation of the peso. (Reporting by Froilan Romero; Writing by Lisa Yulkowski; Editing by Andrea Ricci)