Seoul shares gain after volatile trade;BOK ignored

* KOSPI ends up 0.32 pct

* Daum jumps on M&A hopes

* Construction issues gain on order expectations

(Updates to close)

By Jungyoun Park

SEOUL, June 11 (Reuters) - Seoul shares ended higher after
volatile trade on Thursday, with futures buying on the day of
their expiry fueling markets, while reaction to the central
bank's decision to keep the policy rate unchanged was muted.

The Korea Composite Stock Price Index (KOSPI)
finished up 0.32 percent at 1,419.39 points, after moving in and
out of positive territory throughout the session.

"We saw quite strong futures buying as their expiries
approached, and they are helping to lift shares," said Lawrence
Kim, a market analyst at Woori Investment & Securities.

"Gains in other regional markets are also helping. The market
atmosphere is overall turning more positive," Kim added.

News that South Korea's central bank on Thursday held
interest rates steady at a record low for the fourth consecutive
month had limited impact on markets. [ID:nSEO257805]

"The central bank's decision to keep the base rate unchanged
was neutral on markets as it was widely expected," said Y.S.Rhoo,
a market analyst at Hyundai Securities.

Shares in Daum Communications (035720.KQ) gained 3.49 percent
on rumours that NCSoft Corp (036570.KS) would buy the Internet
portal operator, though spokesmen from both companies denied the
talk. The Korea Exchange on Thursday asked NCSoft to clarify the
rumours by 0900 GMT.

"Daum has long been the subject of merger rumours and this
looks like just another round with a different buyer candidate,"
said Daewoo Securities analyst Kim Chang-kwon.

NCSoft ended down 1.16 percent.

Shares in steelmakers rose after news Brazilian mining giant
Vale (VALE5.SA) agreed on Wednesday to cut 2009 iron ore prices
by as much as 48.3 percent with Japanese and South Korean
steelmakers. [ID:nSPG002369]

POSCO (005490.KS), the world's No.4 steelmaker, finished up
1.82 percent and Dongkuk Steel (001230.KS) rose edged up 0.52
percent.

A local media report that major South Korean builders
including Samsung Engineering (028050.KS) and Daelim Industrial
(000210.KS) were expected to win about $2.7 billion in orders
from a refinery project in Saudi Arabia sent the builders
higher.[ID:nSEO257191]

Samsung Engineering later said in a filing to the Korea
Exchange that it has participated in bids for the project, but
results have not been determined yet.

Shares in Daelim Industrial advanced 4.62 percent and Samsung
Engineering finished up 0.56 percent.

Retail issues continued to gain, riding on brewing earnings
hopes.

Lotte Shopping (023530.KS) climbed 1.19 percent and Hyundai
Department Store (069960.KS) advanced 2.82 percent.