Seoul shares end lower; Hynix, LG Display fall

* KOSPI down; key exporters tumble

* Selloff by institutions weighs on index

* Builders and Ssanyong Motor advance

(Updates to close)

By Ju-min Park

SEOUL, Aug 23 (Reuters) - Seoul shares inched lower on Monday as declines in exporters such as LG Display (034220.KS) outweighed gains in builders' shares amid ongoing uncertainty about the strength of a global economic recovery.

The Korea Composite Stock Price Index .KS11 (KOSPI) finished down 0.44 percent at 1,767.71 points, retreating from earlier gains.

"Fears over the slowing economy may continue to influence the market through the second-half of this year," said Choi Seong-lak, a market analyst at SK Securities. "But, hopes for policies to boost the economy are going to send conflicting messages to the stocks."

Technology stocks except Samsung Electronics (005930.KS) declined, with the world's No. 2 memory chip maker Hynix Semiconductor (000660.KS) down 2.73 percent.

LG Display, the world's second-largest flat panel maker, slid 3.97 percent for a second straight session, pressured by falling panel prices. Affiliate LG Electronics (066570.KS) also lost 1.92 percent.

Steelmakers and carmakers fell. The country's biggest auto maker Hyundai Motor (005380.KS) declined 2.15 percent as investors fretted about sluggish demand in key markets like China. Hyundai Steel (004020.KS) plunged 6.33 percent on prospects that upcoming earnings will be disappointing based on rising raw material prices and poor domestic demand.

Institutions sold 151.64 billion won ($128.1 million) worth of shares, while foreign investors were net buyers of 73.25 billion won worth of shares. Decliners outnumbered advancers 436 to 355 and 92 issues ended flat.

Among stocks in focus, Woori Finance Holdings (053000.KS) slid 2.18 percent after local media reported that it had asked POSCO (005490.KS) and KT Corp (030200.KS) to buy part of a 57 percent stake in the firm that is up for sale.

Builders outperformed the overall market on growing expectations that South Korea will soon announce measures to boost the domestic real estate market. Shares in Daewoo Engineering and Construction (047040.KS) gained 0.99 percent and GS Construction (006360.KS) were up 3.03 percent.

Ssangyong Motor (003620.KS) jumped 6.9 percent after Indian utility vehicles Mahindra & Mahindra (MAHM.BO) signed a memorandum of understanding to buy a majority stake in South Korea's troubled automaker.

OCI, the country's largest maker of polysilicon, leaped 6 percent after it said late on Friday that it had won a $111.5 million polysilicon order from Taiwan. ($1=1183.2 Won)