Seoul shares seen down on inflation worries

SEOUL, May 21 (Reuters) - Seoul shares are likely to retreat
on Wednesday after oil hit a new peak and a key U.S. inflation
gauge rose more than expected, pushing down Wall Street overnight
and rekindling worries about consumer spending.

Major South Korean exporters such as LG Electronics
(066570.KS) and Hyundai Motor (005380.KS) may decline after U.S.
producer prices excluding energy and food rose at their fastest
pace since 1991 in the year to April.[ID:nN20291072] The news
highlighted inflation concerns that may limit the Federal
Reserve's options to support the world's largest economy.

Retailers and airlines such as Lotte Shopping (023530.KS) and
Korean Air Line (003490.KS) may come under pressure after U.S.
crude futures Clc1 settled at $129.07 a barrel after hitting a
high near $130 during the session.[ID:nSP39569]

"It appears that the market's fear has marterialised in hard
numbers, and sentiment will definitely be heavy today," said Kim
Seung-han, a market analyst at CJ Investment & Securities.

"Oil prices and inflation have come up as the next big worry
in the market, and the index will continue to be sluggish unless
we see some stabilisation in this front," Kim added.

The Korea Composite Stock Price Index .KS11 closed down
0.65 percent to 1,873.15 points on Tuesday, drifting further from
the 2008 peak of just above 1,900 points reached on Monday.
----------------------MARKET SNAPSHOT @ 2234 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 1413.4 -0.93% -13.230
USD/JPY JPY= 103.65 0.03% 0.030
10-YR US TSY YLD US10YT=RR 3.7803 -- 0.000
SPOT GOLD XAU= 919.7 0.15% 1.350
US CRUDE CLc1 129.07 0.00% 2.020
DOW JONES .DJI 12828.68 -1.53% -199.48
ASIA ADRS .BKAS 164.82 -2.57% -4.35
-------------------------------------------------------------

MARKETS SUMMARY
*Inflation worries spur sell-off on Wall Street [ID:nN20338631]
*Oil hits record near $130 as supply fears grow [ID:nSP39569]
*Dollar down, interest rate outlook lifts euro [ID:nN20298376]
*Treasury bonds gain as stock slide spurs bid [ID:nN20433384]

STOCKS TO WATCH

Samsung Fire and Marine Insurance (000810.KS)

South Korea's biggest non-life insurer, on Tuesday forecast
its net profit would rise 16 percent in the year to March 2009 to
550 billion won, helped by investment gains.[ID:nSEL000097]

(Reporting by Park Jung-youn; Editing by Keiron Henderson)