Seoul shares firm after loss;Samsung Elec, POSCO up

* Seoul shares turn higher, shake off earlier losses

* Domestic institutions, investment managers fuel gains

* NHN, POSCO advance on positive brokerage notes

(Updates to mid-morning)

By Jungyoun Park

SEOUL, Aug 18 (Reuters) - Seoul shares traded firm on Tuesday following sharp losses in the previous session, with gains by key blue chips such as Samsung Electronics (005930.KS) and POSCO (005490.KS) lending support.

The Korea Composite Stock Price Index .KS11 (KOSPI) was up 0.38 percent at 1,552.98 points as of 0120 GMT, after a near 3 percent loss in the previous session.

"Trading is fairly rangebound, but still doing okay given the falls in U.S. stocks. Seoul markets already saw sharp losses in the previous session, and are recouping some of those," said Kim Seong-bong, a market analyst at Samsung Securities, adding that eyes were on the China market .SSEC after its sharp drops.

"Recovery concerns were renewed after negative U.S. consumer data, but it should not have come as unexpected as the job and real estate markets have not recovered yet," Kim said.

Institutional buying fueled shares, with domestic institutions picking up a net 109.45 billion won worth of stocks, and investment managers leading the buying spree, Korea Exchange data showed.

Key blue chips gained, with Samsung Electronics, the world's No.1 memory chip maker, rising 0.7 percent and Hyundai Motor (005380.KS), South Korea's largest automaker, advancing 1.79 percent.

But weakness in the won KRW= and news of H1N1 flu fatalities in South Korea continued to weigh on airlines and tour issues, sending Korean Air Line (003490.KS) 1.62 percent lower and Hana Tour 039130.KQ down 0.73 percent.

Crude refining issues advanced after U.S. crude futures CLc1 rebounded.

GS Holdings (078930.KS), the holding company of GS Caltex, South Korea's No.2 crude refiner, was up 0.45 percent and S-Oil (010950.KS), the country's No.3, gained 0.87 percent.

NHN (035420.KS) rallied 3.7 percent on positive brokerage comments. JPMorgan said in a report dated August 17 that South Korea's top Internet portal and web search service provider's launch of an online game looked positive, with good feedback from gamers.

Shares in POSCO rose 0.54 percent to 468,000 won after Nomura hiked its target price on the world's No.6 steelmaker by 16 percent to 580,000 won.

Retail issues gained after data showed sales at South Korea's top three department stores rose for a fifth successive month in July from a year earlier. [ID:nSEO327423]

Shinsegae Co Ltd (004170.KS) climbed 1.36 percent and Hyundai Department Store (069960.KS) rose 0.21 percent.

(Reporting by Jungyoun Park; Editing by Jonathan Hopfner)