Seoul shares rally led by bank, brokerage rebound

*Financials recover after losses, easing credit worries

*Easier oil lifts airlines, consumer issues

(Updates to mid-morning)

SEOUL, July 23 (Reuters) - Seoul shares traded higher on
Wednesday after steep falls in oil prices eased inflation worries
and helped lift U.S. stocks overnight, boosting financials and
transporters such as Korean Air Line (003490.KS).

The Korea Composite Stock Price Index .KS11 was up
1.61 percent to 1,586.52 points as of 0053 GMT.

"Today's gains are thanks mainly to falling oil prices.
Inflation has been the major worry among investors, and oil seems
to be on a normalization trend," said Hwang Keum-dan, a market
analyst at Samsung Securities.

"We are seeing foreigners selling less than before, and
sectors that saw the steepest losses, such as banks and
brokerages, are making notable recoveries," Hwang added.

Banking issues rallied across the board, with Kookmin Bank
060000.KS up 3.13 percent to 59,300 won and Shinhan Financial
Group (055550.KS) climbing 3.63 percent to 45,700 won.

Woori Finance Holdings (053000.KS) was up 4.36 percent to
15,550 won, and Hana Financial Group (086790.KS) gained 4.1
percent to 38,100 won.

"Easing credit worries and improving market sentiment
domestically and overseas are lifting banks today, which had
fallen sharply in the recent bear run," said Suh Young-soo, an
analyst at Kiwoom.Com Securities.

South Korean brokerages also posted strong gains, with
Samsung Securities (016360.KS) rising 4.73 percent to 68,600 won
and Mirae Asset Securities (037620.KS) jumping 6.28 percent to
105,000 won.

The brokerage sub-index .KS53 was up 4.4 percent as of 0053
GMT.

Meanwhile transporters and manufacturers such as Korean Air
Line and Hyundai Motor (005380.KS) benefited from U.S. crude's
CLc1 fall overnight to settle at around $128 per barrel.

Korean Air Line rose 4.62 percent to 47,550 won and Asiana
Airlines (020560.KS) went up 3.03 percent to 5,100 won.

Hyundai Motor climbed 1.82 percent to 72,800 won and Kia
Motors (000270.KS) rose 2.16 percent to 11,850 won.

Consumer stocks such as Lotte Shopping (023530.KS) and GS
Shopping (028150.KQ) were also in demand as easier oil calmed
worries about consumer sentiment.

Lotte Shopping advanced 1.46 percent to 312,500 won and GS
Shopping went up 3.1 percent to 59,800 won.