Seoul shares gain; Doosan units, airlines rise

*Doosan units up as it drops Daewoo Shipbuilding bid

*Airlines rise after oil's falls

*Construction issues rise after extended losses

(Updates to midmorning)

By Park Jung-youn

SEOUL, Aug 18 (Reuters) - Seoul shares rose on Monday with
lower oil prices lifting energy price-sensitive airlines, while
Doosan Group units rallied on early market talk, later confirmed,
that it would not bid for Daewoo Shipbuilding (042660.KS).

The Korea Composite Stock Price Index was up 0.2 percent at
1,575.11 points as of 0219 GMT.

"I expect the index to move in a boxed range as the market
lacks overriding negative or positive factors. With major
domestic data, decisions, and earnings already out, stocks will
respond more to external factors," said Kim Joong-won, an analyst
at Solomon Investment & Securities.

"Today we are seeing easier oil helping some sectors that are
sensitive to energy prices, and oversold issues such as
financials rebounding," Kim added.

Shares in Doosan Group units climbed early on Monday morning
on market talk that the South Korean heavy industry group may
drop its bid interest in Daewoo Shipbuilding.

Doosan Group confirmed that it was dropping its bid interest
in Daewoo Shipbuilding, prompting its units to extend their gains.

Doosan Heavy Industries (034020.KS) was up 3.87 percent to
102,000 won and Doosan Infracore (042670.KS) was up 4.49 percent
to 26,750 won.

Daewoo Shipbuilding was down 2.22 percent to 39,600 won.

Korean Air Line (003490.KS) and Asiana Airlines (020560.KS)
advanced after U.S. crude CLc1 fell to around $113 per barrel
on Friday, easing concerns about their operational cost burdens.
Oil moved higher on Monday as a storm threatened production in
the Gulf of Mexico.

Korean Air was up 1.12 percent to 44,950 won and Asiana
Airlines was up 1.26 percent to 4,840 won.

Retailers also rallied as easier oil helped allay worries
about private consumption and consumer sentiment, sending Lotte
Shopping Co Ltd (023530.KS) 2.04 percent higher to 299,500 won
and Shinsegae (004170.KS) 2.61 percent higher to 551,000 won.

Financials traded higher led by Kookmin Bank 060000.KS,
which continued to ride higher on last week's share buyback news,
rising 1.17 percent to 60,500 won. Hana Financial Group
(086790.KS) rose 2.78 percent to 40,650 won.

Meanwhile shares in DC Chemical (010060.KS) rose 1.93 percent
to 344,000 won after the company said it had won a 215.7 billion
won ($207.5 million) order to supply polysilicon to Italy's
Helios Technology SRL.

STX Shipbuilding (067250.KS) rose 1.31 percent to 23,250 won
after the company said it has won a 322 billion won ($309.8
million) order to build two very large crude oil carriers for an
unidentified European company.

Construction issues rallied after their latest extended
losses, with Hyundai Engineering & Construction (000720.KS)
rising 2.4 percent to 68,400 won and Daewoo Engineering &
Construction (047040.KS) up 7.31 percent to 13,950 won.