Seoul shares dip; Hyundai E&C jumps after stake sale

* KOSPI down 0.23 pct

* Hyundai Engineering up after banks' stake sale

* Stronger won weighs on some exporters

(Updates to mid-morning)

By Jungyoun Park

SEOUL, May 8 (Reuters) - Seoul shares turned lower in
volatile trade on Friday, with caution before U.S. job data
keeping investors in check, but Hyundai Engineering (000720.KS)
rose after news creditor banks sold a stake in the firm.

The Korea Composite Stock Price Index (KOSPI) was
down 0.23 percent to 1397.89 points as of 0157 GMT.

"The results of U.S. banks' stress test came in line with
markets' expectations and subsequent gains in U.S. futures are
doing the markets good," said Won Sang-pil, a market analyst at
Tong Yang Securities.

"But there is definitely valuation pressure as the markets
have risen a lot over the past several weeks," Won added.

The KOSPI was in overbought territory according to its
20-day relative strength index.

U.S. regulators told top banks on Thursday to raise $74.6
billion to build a capital cushion officials hope will restore
faith in financial firms and set a course out of the deepest
recession in decades.[ID:nN07333426]

S&P 500 futures SPc1 was up 0.66 percent and Dow Jones
Industrial Average futures DJc1 rose 0.54 percent.

Analysts also said caution before U.S. job data on Friday
limited gains.

The number of jobs U.S. non-farm payrolls shed last month
will get the spotlight on Friday as investors try to tell whether
the end of a deep recession is near. [ID:nN07574846]

Shares in Hyundai Engineering & Construction climbed 4.31
percent after news seven South Korean banks sold a stake in the
company in a block deal at the high end of their offered range.
[ID:nSEO344279]

"Hyundai Engineering shares are flying since this block deal
resolves overhang issues," said Cho Joo-hyung, an analyst at Hana
Daetoo Securities.

"The smaller remaining stake makes it easier for the banks to
find a strategic investor by making the stake purchase less
overwhelming," Cho added.

But stronger won KRW= continued weighing on some exporting
issues on concerns it may dent the price competitiveness of South
Korean goods.

Hyundai Motor (005380.KS), South Korea's top automaker, was
down 2.41 percent and Hynix Semiconductor (000660.KS), the
world's No.2 memory chip maker, retreated 1.07 percent.

Meanwhile crude refiners continued to be helped by the
strengthening domestic currency and rising crude prices, which
point to a pickup in demand.

SK Energy (096770.KS), South Korea's top crude refiner,
advanced 2.78 percent and S-Oil (010950.KS) rose 2.25 percent.

Elsewhere NHN Corp (035420.KS) rose 1.27 percent after South
Korea's top Internet portal and web search service provider said
on Friday its first quarterly net profit went up 17.9 percent
from a year ago. [ID:nSEO285462]

(Editing by Jonathan Hopfner)