Seoul shares end flat on earnings caution; Hynix jumps

* KOSPI ends flat on earnings, N.Korea caution

* Hynix jumps on gains in memory chip prices

* Losses by energy, shipbuilders weigh on index
(Updates to close)

By Jungyoun Park

SEOUL, July 2 (Reuters) - Seoul shares ended flat on Thursday
as investors remained cautious ahead of the corporate earnings
season, and weighed down by shipbuilders and energy issues, but
Hynix Semiconductor (000660.KS) jumped on gains in DRAM memory
chip prices.

The Korea Composite Stock Price Index .KS11 (KOSPI)
finished flat, down 0.01 percent at 1,411.48 points.

"Investors remained cautious as second-quarter earnings
season looms," said Kim Joon-kie, a market analyst at SK
Securities.

"There were also concerns North Korea may take aggressive
action, such as firing another missile, on the upcoming U.S.
Independence Day holiday on July 4th," Kim added.

Hynix Semiconductor jumped 5.8 percent on gains in spot
prices of some key DRAM memory chips, which rose in 1-percent
ranges, according to electronics components research firm
DRAMeXchange.

"The third quarter has traditionally been a good season for
DRAM makers as prices tend to do well ... and actual gains in key
spot prices helped boost sentiment further," said Lee Ka-keun, an
analyst at IBk Securities.

Kia Motors (000270.KS) rose 2.01 percent at12,700 won as the
outlook for South Korea's No.2 carmaker steadily improved, also
helped by a bullish brokerage note.

JPMorgan upgraded Kia Motors to "overweight" from "neutral"
and raised its target share price by 33 percent.

JPMorgan cited "incrementally strong volume momentum in
overseas markets ... new model launches ... continuous
improvement in interest expense coverage from growing earnings
power," as positive factors, raising its target share price to
15,000 won from 11,300 won.

But crude refiners including SK Energy (096770.KS) declined
after falls in U.S. crude CLc1, which pushed shares in South
Korea's top crude refiner down 1.91 percent. S-Oil (010950.KS),
South Korea's No.3 crude refiner, sank 0.71 percent.

But air carriers were helped by the fall in crude prices.
Asiana Airlines (020560.KS) ended up 0.67 percent and Korean Air
Line (003490.KS) was up 0.28 percent.

Falls in shipbuilders following their latest gains pressured
the market. Hyundai Heavy Industries (009540.KS), the world's
No.1 shipbuilder, fell 1.53 percent. STX Offshore & Shipbuilding
(067250.KS) lost 1.85 percent.

Losses in the Dry Baltic Index .BADI, which tracks costs of
shipping key commodities, also pressured shipping issues.

Hanjin Shipping (000700.KS) declined 1.92 percent and STX Pan
Ocean (028670.KS) fell 2.53 percent.

But NHN Corp (035420.KS), South Korea's top Internet portal
and web search service provider, advanced 1.11 percent after it
unveiled the search engine Naver Japan on Wednesday for open
trial service.

Analysts said the response from Japanese web surfers had been
positive.

"The Japanese web search market is significantly larger than
the South Korean market. Winning only a small portion of that
market, say 10 percent, would still boost NHN's growth potential
substantially," Kiwoom Securities analyst Jang Young-soo said.