Seoul shares extend gains after BOK rate hold

(Updates to mid-day)

By Jungyoun Park

SEOUL, Oct 9 (Reuters) - Seoul shares extended gains to rise as much as 1.8 percent on Friday after the Bank of Korea held its key interest rate steady for the eighth month, and as central bank comments cast doubt about a November increase.

"The rate hold decision and comments by the Bank of Korea's chief reduced the possibility of a near-term rate rise and cast relief over the market," said Lim Dong-min, a market analyst at Dongbu Securities.

"The rate decision and monetary stance uncertainty had discouraged buying, but now that this factor has been removed, sentiment has improved somewhat," Lim said, adding that a strong set of third quarter earnings could further lift the main stock index to the 1,700-point level, near the year's high of 1,723.

As of 0428 GMT, the Korea Composite Stock Price Index (KOSPI) was up 1.49 percent at 1,639.56 points.

Construction issues rallied as appetite for builders strengthened amid expectations that a rate rise may not take place in the immediate future, lessening the burden of mortgage loans held by house buyers and builders' debts with banks.

Hyundai Engineering & Construction (000720.KS) rose 4.59 percent and Samsung Engineering Co (028050.KS) gained 5.77 percent.

Key technology issues led gains, with Samsung Electronics (005930.KS), the world's No.1 memory chipmaker, rising 3.75 percent and Hynix Semiconductor (000660.KS) up 1.81 percent.

Hyundai Motor (005380.KS), South Korea's top automaker, rose 4.92 percent and POSCO (005490.KS), the world's No.4 steelmaker, advanced 3.43 percent. (Editing by Chris Lewis)