By Carla Mozee

Chilean stocks fell Monday in the first session of trading after a massive earthquake left hundreds dead and interrupted power supply in the world's largest copper-producing country.

Chile's IPSA index finished 1..2% lower at 3,782.04, able to pare much deeper losses but still weighed by investor concerns about "a near-term hit" to economic growth, said Win Thin, senior currency strategist at Brown Brothers Harriman, in a note to clients.

The pullback arrived one session after the blue-chip index closed at its highest level ever.

Trading on the country's exchange opened at its normally scheduled time. An 8.8-magnitude earthquake hit about 230 miles south of Santiago, and about 70 miles from the city of Concepcion in the early morning hours of Feb. 27.

In the Chilean capital of Santiago, shares of market heavyweight and pulp and paper provider Copec slumped 2.3%. Stock in air carrier Lan Airlines (LFL) lost 1.6%, while shares of fertilizer maker SQM (SQM) fell 0.6% and Banco de Chile (BCH) gave up 0.5%.

But "not all [stocks]," moved lower, said Jack Dzierwa, global strategist at U.S. Global Investors, noting that investors snapped up shares of construction firm Salfacorp and forestry products company Masisa, as investors look for opportunities in the third most expensive market for equities among emerging markets, behind Taiwan and India

Salfacorp shares surged 6%, Masisa shares gained 6.3% and construction-services provider Besalco jumped 8.2%.

In New York, the Bank of New York Mellon's index tracking U.S.-listed shares of Chilean companies (16899W19) fell 1%. The index tracks 12 issues.

Among exchange-traded funds, the iShares MSCI Chile Investable Market Index Fund (ECH) closed down 1.4%.

Meanwhile, the country's currency rose against the U.S. dollar as copper futures climbed, lifted after some mining operations in Chile were halted because of the earthquake. Copper prices had climbed the most in nearly a year before paring advances to end 2.1% higher at $3.35 a pound.

"The mining sector, situated mostly in the northern part of the country, seems to have emerged relatively unscathed, except for some power outages," said Daniel Kerner, Latin America analyst at the Eurasia Group.

The currency traded at 523.25 pesos per greenback, compared with Friday's close at 529.80 pesos.

Chilean mining giant Corporacion Nacional del Cobre de Chile -- better known as Codelco -- said it will use plants in northern Chile to make up for the disruptions. The bulk of mining activity is conducted in the northern part of the Andean nation, away from the center-south portion of the country that was hardest hit by the temblor.

Codelco is not publicly listed.

The peso is poised to post further gains, wrote Thin, in part because the government is likely to tap savings from a fund to pay for reconstruction efforts. The funds are kept in dollars, and will be needed to be converted into pesos for rebuilding efforts.

"Furthermore, the price of copper has moved higher after the earthquake on supply concerns, which should act as a positive terms of trade effect that boosts the peso exchange rate," he wrote.