Seoul shares gain; Samsung Elec, Hyundai Motor up

* Seoul shares end 0.2 pct higher after volatile session

* Domestic institutions, investment managers fuel gains

* Blue chip exporters such as Samsung Elec lead rises

(Updates to close)

By Jungyoun Park

SEOUL, Aug 18 (Reuters) - Seoul shares ended firm on Tuesday
after volatile trade, recouping losses made after the news of
former President Kim Dae-jung's death supported by steady
institutional buying and gains in key blue chips.

The Korea Composite Stock Price Index .KS11 (KOSPI)
finished up 3.18 points at 1,550.24 points.

"Recent weakness in both U.S. and Chinese markets weighed
heavily on local stocks, as did their substantial gains in recent
weeks," said Bae Sung-young, a market analyst at Hyundai
Securities.

News of former President Kim Dae-Jung's death initially
pushed shares down more than 1 percent, but they quickly picked
up later in the session.

Institutional buying fueled markets, with domestic
institutions picking up a net 165.4 billion won ($131.6 million)
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, ending up 2.38 percent and Hyundai Motor
(005380.KS), South Korea's largest automaker, advancing 2.34
percent.

But shares in Kumho Tire (073240.KS) fell 5.07 percent after
the company said late on Monday unionised workers had staged a
partial strike over a wage dispute that began last Friday.

The company said it would notify the Korea Exchange when
operations resumed.

Airlines continued to trade weak following recent news of
H1N1 flu fatalities, with Korean Air Line (003490.KS), South
Korea's No.1 air carrier, ending down 1.62 percent and Asiana
Airlines (020560.KS) losing 1.27 percent.

Banking issues also suffered after their U.S. peers' sharp
losses, with the S&P financial index .GSPF shedding 4.26
percent overnight.

KB Financial Group (105560.KS) fell 1.36 percent and Shinhan
Financial Group (055550.KS) ended 1.02 percent lower.

Defensive issues, such as mobile phone carrier SK Telecom
(017670.KS) and beverage maker Lotte Chilsung (005300.KS)
outperformed amid renewed economic recovery fears, gaining 1.16
percent and 1.21 percent respectively.
($1=1256.8 Won)