S.Korea won falls on stocks, oil; no intervention

(Updates to domestic session close)

SEOUL, July 4 (Reuters) - The South Korean won KRW= slid
0.5 percent versus the dollar on Friday as inflation worries from
higher oil prices hit local shares and as monetary authorities
held the sidelines after Wednesday's reported dollar sales.

Investors stayed cautious over the chances of dollar-selling
intervention and after a local shipbuilder announced a major
foreign order, but the won extended its falls as the foreign
exchange authorities were not seen in the market, traders said.

Dealers said authorities sold a massive $3 billion on
Wednesday, following up on $5 billion of reported sales in June
as it fights to shore up the won and bear down on inflation.

The local unit is expected to remain under pressure next
week, as more investors are shunning South Korean stocks on
concerns that inflation may hurt Asia's fourth-largest economy
and on record-breaking oil prices, analysts said.

Seoul shares closed 1.8 percent lower extending their losing
streak to a seventh session, the longest in 5 years.

"The won's supplies are so strong that a major ship order did
not provide big support. The won is expected to weaken to 1,060
(per dollar) next week and market players are likely to push it
down further," said Jeong My-young, an analyst at Samsung Futures
Inc.

"But the authorities will definitely defend it as the
currency is the only way to curb inflation now," Jeong added.

The won has lost about 10 percent this year against the
dollar, making it the worst performing currency in Asia and
inflating the local prices of imported oil and raw materials,
which have already been rallying on their own.

The South Korean currency was quoted at 1,050.2/1.0 per
dollar as of 0600 GMT, compared to compared to Thursday's
domestic close of 1,045 KRW=KFTC.

The unit briefly jumped to as high as 1,040.2 amid wariness
of intervention, but traders said the spike was not likely the
result of the authorities' dollar sales.

Intervention wariness mounted as traders said the Philippines
central bank earlier intervened by selling dollars to support the
struggling peso after the country's annual inflation rose to a
14-year high in June.

But South Korean foreign authorities are unlikely to be able
to push up the won, analysts said.

"The won's direction has already been decided. The next level
is 1,065 (per dollar) as the won weakened past 1,050 today. If
the 1,065 is broken, the won is expected to fall to 1,100 without
any support level," said Lee Jin-woo, a senior analyst at NH
Investment & Futures Inc.

Oil steadied above $145 a barrel on Friday in Asia ahead of
the U.S. Independence Day holiday and on concerns over
geopolitical tensions in the Middle East.

Foreign investors sold a net 265.1 billion won worth of
stocks in the country's main exchange. They dumped a combined net
5.65 trillion won during the previous 19 consecutive sessions.

On the corporate front, Daewoo Shipbuilding and Marine
Engineering Co Ltd (042660.KS: Quote, Profile, Research) said it had won a 2.44 trillion
won ($2.34 billion) ship order from Europe, causing expectations
for more won demand. [ID:nSEO338520]

0600 GMT 0310 GMT prev close
Won KRW= 1,050.2/1.0 1,047.5/7.8 1,045.0
Yen/won JPYKRW=R 9.8324/71 9.8089/01 9.8398/83
KOSPI .KS11 1,577.94 1,587.02 1,606.54
(Reporting by Cheon Jong-woo; Editing by Keiron Henderson)