Seoul shares end firm; banks, Samsung Elec rise

* KOSPI finishes up 0.7 pct, fueled by foreign buying

* KB Financial Group falls ahead of its weak results

* Key bluechips, Samsung Elec, POSCO fuel market gains

(Updates to close)

By Jungyoun Park

SEOUL, July 30 (Reuters) - Seoul shares ended firm on
Thursday as investors shrugged off North Korea-related news,
with key blue chips including Samsung Electronics (005930.KS)
and POSCO (005490.KS) leading gains.

The Korea Composite Stock Price Index .KS11 (KOSPI)
finished up 0.68 percent at 1,534.74 points.

"Shares came under pressure following recent sharp gains,
and as domestic institutions were selling -- it seems
institutions are selling on the back of a fund redemption rise,"
said Y.S.Rhoo, a market analyst at Hyundai Securities.

"Key domestic and U.S. economic data, such as South Korea's
industrial output tomorrow, is expected to come out solid, so
the market atmosphere will likely be positive," Rhoo added.

Analysts said reports a South Korean fishing boat had been
towed by a North Korean patrol ship early on Thursday morning
had little visible impact on Seoul stock markets.
[ID:nSEO355911]

Foreign investors were buyers of 265.5 billion won worth,
picking up local shares for a twelfth straight session.

Key blue chips in Seoul markets, such as Samsung
Electronics, the largest shares on the KOSPI, accounting for
more than 10 percent of its market cap, finished up 2.44
percent, after rapid gains near the end of trading hours.

"Samsung Elec shares drew robust foreign buying
appetite...it is possible that Sony's results today also stoked
appetite towards Samsung Elec further, as the company has
outdone Sony, and is expected to down the quarter," said Suh
Do-won, an analyst at Hanwha Securities.

Sony posted better-than-expected quarterly results, but
Samsung Electronics' figures came out far better, said Steve
Lee, an analyst at Goodmorning Shinhan Securities.

Banking issues rose amid rising hopes about their third
quarter outlook.

Shares in Shinhan Financial Group (055550.KS) rose 1.51
percent after it reported on Wednesday a narrower-than-expected
decrease in quarterly profit with a modest interest margin
contraction. [ID:nSEO194317]

JPMorgan on Thursday raised its target price for Shinhan by
14 percent to 50,000 won ($40.2) and its fiscal 2009 net profit
estimate to 1.4 trillion won from 1.1 trillion won to reflect
the stronger-than-expected quarterly earnings.

But shares in KB Financial Group (105560.KS) declined 1.62
percent ahead of its earnings after the market close on
Thursday.

KB Financial Group (105560.KS), the parent company of South
Korea's largest bank, Kookmin, on Thursday posted
worse-than-expected quarterly profits, hit by an extended steep
decline in interest margins. [ID:nSEF000304]

Meanwhile, shares in Korea Gas Corp (KOGAS) (036460.KS)
jumped 9.24 percent after it posted solid results for the
April-June quarter on Wednesday. [ID:nSEO51421]

Analysts said its earnings would continue to improve in the
third quarter with a hike in electricity prices reflected from
late June. [ID:nSEO314490]