Seoul shares rise as foreigners buy; Hynix up

*KOSPI up 0.41 pct

*Hynix rises on hopes of bottom, sale

*LG Chem advances on General Motor deal

(Updates to midmorning)

By Jungyoun Park

SEOUL, Jan 13 (Reuters) - Seoul shares were slightly up on
Tuesday despite falls on Wall Street, helped by Hynix (000660.KS)
which rose on hopes chip prices have bottomed and after a local
media report lead creditors plan to sell it by September.

The Korea Composite Stock Price Index .KS11 was up 0.41
percent at 1,161.53 points as of 0252 GMT, up from the session's
low of 1,133.94 and on course to end a three-day losing streak.

"Foreign investors are again fuelling the gains. Whereas they
had been underweight on South Korean stocks before, they seem to
have notched up the grade to neutral now," said Juhn Chong-kyu, a
market analyst at Samsung Securities.

Foreign investors were net buyers of 8.7 billion won as of
0232 GMT.

"Seoul share prices have undergone big losses, and currency
markets are far more stable than before, pointing to some gains
from a stronger won versus the U.S. dollar. Also, South Korean
corporate profits, while bad, are not as bad as, say Japan's
whose sales probably suffered more due to stronger yen," Juhn
added.

However analysts maintained that the main index was not on a
meaningful upward trend.

"There are few positives in markets now, and the fact that
earnings results, which are expected to be quite bad, are soon
due out is not helping either," said Han Beom-ho, a market
analyst at Goodmorning Shinhan Securities.

"The index is under downward pressure but will remain above
the 1,100-level, near the 60 day moving average, unless we see
dramatically bad developments such as serious difficulties in
delivering the planned rescue package in the United States."

Shares in Hynix were up 3.03 percent after news its
shareholders are looking to sell the world's No.2 memory chip
maker within this year.

Lead managers for a deal to sell 36 percent in Hynix have
agreed to sell the stake by a tentative deadline of September, a
leading Hynix shareholder said on Tuesday.[ID:nSEO154239]

Comments by its CEO on Monday that the fourth quarter of 2008
may have formed the bottom in the ongoing memory chip downturn
also helped .[ID:nSEO40717]

"Certainly some gains in memory chip prices are notable,"
said Song Jong-ho, an analyst at Daewoo Securities.

"The fourth quarter may not be the bottom, but it is near. We
think first quarter this year maybe it," said Kim Gee-soo, an
analyst at Goodmorning Shinhan Securities.

"However a sale within this year is nearly impossible given
current DRAM and stock market conditions. Who'd buy a debt laden
DRAM maker when the memory chip market is submerged so deeply in
a slowdown?" Kim added.

Meanwhile shares in LG Chem (051910.KS) advanced 3.85 percent
after news that it had been selected to build lithium-ion
batteries for major automaker General Motors Corp's (GM.N)
all-electric Chevy Volt.

Shares in Hanwha Corp (000880.KS) and Daewoo Shipbuilding &
Marine Engineering (042660.KS) were both up on continuing talk in
markets that the chemical-to-financial conglomerate may walk away
from the deal, raising speculation a new suitor may emerge.

Hanwha was up 3.76 percent and Daewoo climbed 4.15 percent.

(Reporting by Jungyoun Park; editing by Keiron Henderson)