Chile peso at 14-mo high, banks lead bourse gains

SANTIAGO, Nov 6 (Reuters) - Chile's peso firmed to a 14-month high on Friday, boosted by unwinding of carry trades and a weaker dollar, while shares rose in thin, cautious trade led by gains in bank and commodity shares, traders said.

The peso firmed 0.44 percent to close at 521.20/521.70 per dollar from Thursday's close of 523.50/523.80.

The peso has gained 23 percent so far this year after sliding 22.3 percent in 2008 during the worst of the financial crisis.

"There are still expectations of bigger (dollar) inflows in the short term ... so the peso continues to trend higher," said one foreign exchange dealer, asking not to be named. "Also, the dollar continues to be febrile against other major currencies, so the local market has been adjusting to that weakness."

Chile's blue-chip IPSA share index .IPSA moved higher, led by commodity stocks and bank shares' bounce after a fall on Thursday.

The blue-chip IPSA rose 0.37 percent to close at 3,364.23 points and the all-market IGPA .IGPA closed 0.31 percent higher at 15,825.58.

Conglomerate Copec COP.SN, the most heavily-weighted share on the Santiago bourse, rose 1.59 percent to 7,416.70 pesos a share, while Banco Santander Chile STG.SN, the country's biggest private bank, rose 3.09 percent to 29.32 pesos.

Shares in Chilean energy group Edelnor EDN.SN surged 5.1 percent in late trade to 977.17 pesos after state copper giant Codelco announced a deal with French utility firm GDF Suez (GSZ.PA: Quote, Profile, Research) to merge electricity generation assets in northern Chile.

"There's been little movement today on below average volumes," said Ivan Ortuzar, a sales trader with CorpCapital brokerage. "Local investors have been cautious on market uncertainty and that's reflected on low volumes traded."