Seoul shares up on export, China data; banks rally

* KOSPI rises 1.55 pct; positive local, Chinese data help

* Banks rally on improving outlook, attractive valuation

* Telcos up on hopes for easier marketing war

(Updates to close)

By Jungyoun Park

SEOUL, July 1 (Reuters) - Seoul stocks rose on Wednesday,
helped by positive South Korean export and Chinese manufacturing
data, and by rallies in tech and financial shares including KB
Financial Group (105560.KS).

The Korea Composite Stock Price Index .KS11 (KOSPI)
finished up 1.55 percent at 1,411.66 points.

"Earlier negative trading on weakness in U.S. consumer
confidence data was offset by positive South Korean export and
Chinese manufacturing data," said Kim Seung-han, an analyst at
HI Investment Securities.

South Korean exports in June fell from the year-ago level at
the slowest clip since October 2008, provisional government data
showed on Wednesday, bolstering hopes for a sustained recovery
in Asia's fourth-largest economy. [ID:nSEV000741]

China's manufacturing sector extended a steady if
unspectacular recovery in June, surveys released on Wednesday
showed, adding evidence across Asia that the regional economy is
finally pulling out of a deep dive. [ID:nPEK138883]

Institutional buying fueled the rally as domestic investment
management houses and pension funds actively bought into
markets.

Institutions were buyers of a net 160.2 billion won ($126.4
million).

Foreign investors were buyers of a net 58.3 billion won
worth of shares, picking up domestic stocks for a fifth
consecutive session.

Shares in banks rallied on Wednesday amid growing optimism
toward the banking sector, and as investors looked for cheaper
bets as key blue chips in auto and tech sectors have
outperformed.

"We are overweight on banks now, as we expect banks'
writedown burdens to lessen in the third quarter. Also net
interest margin is likely to improve as well," said Lee
Hyeok-jae, an analyst at IBK Securities.

"Also some key blue chips such as those in auto and tech
sectors have risen a lot lately, and investors are looking for
cheaper bets in sectors whose prospects are improving," Lee
said, adding that banking issues were trading at price-to-book
ratios below 1.

Shares in KB Financial Group (105560.KS) finished up 8.64
percent and Hana Financial Group (086790.KS) rose 8.76 percent.

Shares in telecommunications companies rose across the board
on Wednesday after the head of the Korea Communications
Commission asked the CEOs of South Korean wireless carriers to
"refrain from overheating marketing competition."

"Such comments from the commission are positive in that a
consensus has been formed between the government and also among
mobile phone operators that marketing competition has been
overdone," said Stan Jung, an analyst at Woori Investment &
Securities.

The commission has also asked companies to invest more in
improving the quality of the network and in emerging areas such
as IPTVs.

"Also as today is the first day of the second half of the
year, dividend expectation was highlighted," Jung added.

Shares in SK Telecom (017670.KS) advanced 2.59 percent and
KT (030200.KS) rose 2.45 percent. LG Telecom (032640.KS) rallied
7.23 percent.

But automakers declined despite solid monthly sale figures.

Hyundai Motor (005380.KS) sank 1.21 percent after posting a
9.6 percent rise in its monthly sale in June from a year ago.
[ID:nSEL000675]

Kia Motors (000270.KS) slipped 1.19 percent after posting a
23.2 percent growth in its sale.

"Expectations that their June sales would come out solid had
been there for quite sometime. But investors are starting to
wonder of such trend would continue into July," said Lee
Sang-hyun, an analyst at Hana Daetoo Securities.

Key technology issues also rallied, with Samsung Electronics
(005930.KS), the world's top memory chip maker, rising 1.86
percent and LG Electronics (066570.KS), the world's No.3 handset
maker, going up 1.28 percent.