Seoul shares fall; Hyundai Mobis, shipbuilders down

* KOSPI falls 1.0 percent as regional markets suffer

* Hyundai Mobis tumbles after Hyundai Motor share purchase

* Tong Yang Securities up on Tong Yang Life IPO expectations

(Updates to close)

By Jungyoun Park

SEOUL, Aug 31 (Reuters) - Seoul shares fell on Monday as
market sentiment suffered from declines in other regional markets
including China .SSEC, while falls in Hyundai Mobis (012330.KS)
and shipbuilders' shares weighed on broader markets.

The Korea Composite Stock Price Index .KS11 (KOSPI)
finished down 1.00 percent at 1,591.85 points.

"Markets will probably continue to be range-bound for some
time, with caution ahead of key U.S. data and regional markets'
decline weighing," said Won Jong-hyuck, an analyst at SK
Securities.

Shares in Hyundai Mobis tumbled after the auto parts making
affiliate of Hyundai Motor (005380.KS) said late on Friday it had
bought Hyundai Motor shares worth 1.34 trillion won ($1.08
billion) from Hyundai Steel (004020.KS).

"There are doubts whether Hyundai Mobis' purchase of Hyundai
Motor shares at this point (following Hyundai Motor's big gains)
is a good investment decision, as it is costing Hyundai Mobis a
lot of money," said Lee Sang-hyun, an analyst at Hana Daetoo
Securities.

Macquarie also said in its note on Monday that the family of
Chung Eui-sun, the vice chairman of Hyundai Motor, and his
father, Hyundai Automotive Group Chairman Chung Mong-koo, will
likely see an "incentive...to reduce the market cap of Mobis to
further raise its stake (in Mobis)."

Shares in Hyundai Mobis tumbled 9.86 percent, while Hyundai
Steel rose 4.34 percent.

Meanwhile, Tong Yang Group related issues rose on its life
insurer affiliate, Tong Yang Life Insurance Co Ltd's plans to
raise up to 440 billion won ($353 million) in an IPO next month,
making it the country's first life insurer to go public.
[ID:SEO12194]

Shares in Tong Yang Securities, which controls 14.8 percent
of Tong Yang Life, according to the Korea Exchange filing earlier
this month, ended up 1.25 percent.

Shipbuilders fell across the board, weighed by losses in the
Baltic Dry Index .BADI, which tracks the cost of shipping key
commodities.

Hyundai Heavy Industries (009540.KS) fell 5.69 percent and
Daewoo Shipbuilding & Marine Engineering (042660.KS) lost 3.15
percent.

But memory chip makers rose, led by Hynix Semiconductor
(000660.KS), after Intel Corp (INTC.O) raised its outlook for
third-quarter revenue on stronger-than-expected demand for its
microprocessors and chipsets. [ID:nN28172958]

Shares in Hynix, the world's No. 2 memory chip maker, rose
2.81 percent and Samsung Electronics (005930.KS), advanced 0.92
percent.