Seoul shares down; muted reaction to rate hold

(Updates to midday)

By Jungyoun Park

SEOUL, May 12 (Reuters) - Seoul shares traded lower on
Tuesday, tracking falls on Wall Street, with a South Korean
central bank decision to keep the benchmark interest rate
unchanged having limited impact on stocks.

The Korea Composite Stock Price Index .KS11 (KOSPI) was
down 0.68 percent at 1,405.48 points as of 0238 GMT.

"Today's falls are mostly technical following the latest set
of gains and falls overnight on Wall Street. There is an
appetite to lock in profits at the index's psychologically
significant 1,400-point level," said Lee Kyoung-su, a market
analyst at Taurus Investment & Securities.

Analysts said the Bank of Korea's decision on Tuesday to
keep the base rate steady at 2 percent had a limited impact on
stock markets. [ID:nSEO141340]

"The rate freeze was widely expected. Investors will pay
more attention to the central bank's comments on the broader
economy," Lee added.

Losses were led by financials, with KB Financial Group
(105560.KS) down 4.24 percent, but exporters rose on the back of
the won currency's KRW= weakening on the day.

Hyundai Motor (005380.KS), the country's top carmaker, was
up 0.77 percent. Hynix Semiconductor (000660.KS), the world's
No.2 memory chipmaker, was up 2.46 percent.

(Editing by Chris Lewis)