Seoul shares gain on retailers, automakers

* Hyundai outperforms despite investigation news

* Technology plays extend falls amid global economic concerns

(Updates to close)

By Jungyoun Park

SEOUL, Sept 1 (Reuters) - Seoul shares rose on Wednesday boosted by auto counters including Kia Motors (000270.KS), which gained on solid August sales data, and rallies in domestic consumption-focused issues such as Lotte Shopping (023530.KS).

The Korea Composite Stock Price Index .KS11 (KOSPI) ended up 1.26 percent at 1,764.69 points.

"Domestic consumption shares are leading the market as investors seek out defensive, domestic-focused stocks amid a highly uncertain global economic outlook," said Lim Dong-min, a market analyst at KB Investment & Securities.

Hite Brewery Co Ltd 103150.KS rose 1.5 percent and snack manufacturer Orion Corp (001800.KS) advanced 5 percent.

Retail issues rallied, helped by solid Chinese manufacturing data, according to Kim Ki-young, an analyst at SK Securities.

China's manufacturing economy staged a moderate rebound in August after slowing for a several months.[ID:nTOE68001O]

Lotte Shopping Co Ltd (023530.KS), South Korea's top retailer, jumped 7.9 percent to 419,000 won, its highest close since November, 2007.

Shinsegae Co Ltd (004170.KS), the country's No.2 retailer, gained rose 3.1 percent.

Kim Kyeong-gi, an analyst at Hanwha Securities, said retailers were also enjoying strong earnings momentum.

"Retailers, especially department stores, have been showing high growth recently, reinforcing investor confidence."

Hyundai Motor Co (005380.KS) rose 1.8 percent despite news U.S. safety regulators had opened a preliminary investigation into claims its Sonata sedan may have steering problems, and after data showed the automaker's August sales volume grew 17 percent from a year ago. [ID:nN31234864] [ID:nSEU003124]

A Hyundai Motor spokesperson on Wednesday downplayed the issue, saying only two such cases had been reported and they involved no injuries or accidents.

Kia Motors Corp (000270.KS), the country's second-largest automaker, rose 3.6 percent after reaching a tentative agreement late on Tuesday with its labor union on a wage increase plan for this year.

"The settlement happened without a strike for the first time in two decades," said Koh Tae-bong, an analyst at IBK Securities, noting that preventing production losses from strikes would likely help Kia's earnings in the third quarter.

Kia also reported August sales grew 55 percent from a year ago. [ID:nSEU003123]

However technology issues retreated amid worries of a slowdown in overseas demand.

LG Electronics Inc (066570.KS), the world's No.3 mobile handset maker, fell 0.6 percent and Hynix Semiconductor Inc (000660.KS), the world's No.2 memory chip maker, retreated 1.2 percent.