Seoul shares rise on LG Elec, foreign buying

* Foreign buying set to continue for 10th session

* LG Elec rises; investors look for hope in TV, appliances

(Updates to mid-morning)

By Jungyoun Park

SEOUL, March 25 (Reuters) - Seoul shares turned up on Thursday helped by rises in banking and tech issues such as LG Electronics (066570.KS), but news of Portugal's credit rating downgrade and weak U.S. home sales data dented sentiment.

The Korea Composite Stock Price Index .KS11 (KOSPI) was up 0.34 percent at 1,686.80 points as of 0132 GMT.

"After U.S. home sales came out weak, concerns arose that stocks may have risen prematurely, while the economy is clearly in fragile shape. Added to that was Portugal's ratings downgrade," said Y.S.Rhoo, a market analyst at Hyundai Securities.

Sales of newly built U.S. homes fell for a fourth straight month to a record low in February.[ID:nN24144679]

Fitch Ratings cut Portugal's sovereign credit rating by one notch to AA- on Wednesday, citing budgetary underperformance in 2009.[ID:nLDE62N193]

"The downgrade will not have a major negative impact on the Seoul market by itself, but if as feared it is followed by similar actions by rating firms on the UK and Japan, the market will probably be dealt a real blow," Rhoo added.

Euro zone officials failed on Wednesday to break a deadlock over how to help debt-stricken Greece on the eve of a EU summit, driving the euro to a 10-month low.[ID:nLDE62N14Y]

Foreign investors purchased a net 85.4 billion won ($75.11 million) worth of shares, heading for a 10th consecutive buying session, which would be the longest such streak since late September 2009.

Losses in technology issues weighed, with LG Display (034220.KS) falling 0.64 percent and Samsung Electronics (005930.KS) shedding 0.49 percent.

But shares in LG Electronics (066570.KS) outperformed, gaining 4.15 percent after recent weakness.

"Investors are starting to realise that while LG's smartphone business performance will not be strong in the first quarter, its television and appliance units will still do very well," said Baek Jong-suk, an analyst at Hyundai Securities.

Banking issues advanced, with KB Financial Group (105560.KS) up 1.73 percent and Hana Financial Group (086790.KS) rising 1.41 percent.

($1=1137.0 Won)