Seoul shares flat as investors cautious ahead of elections
* Korean Air rises after abandoning KAI bid
* LG Households up after buying Japanese firm
SEOUL Dec 18 (Reuters) - Seoul shares rose marginally but underperformed others in Asia as reluctance to build positions ahead of South Korea's presidential vote on Wednesday outweighed hopes for a U.S. deal on its fiscal woes.
The Korea Composite Stock Price Index (KOSPI), which fell 0.6 percent on Monday, was up 0.1 percent at 1,984.58 points as of 0233 GMT.
"The fiscal negotiations which boosted U.S. stocks seem to have a lesser impact on the KOSPI," said Park Seok-hyun at KTB Investment & Securities.
U.S. President Barack Obama and Republican John Boehner on Monday inched toward a deal that would avert steep tax hikes and spending cuts that could push the economy into recession.
Shares in Korean Air Lines were up 2.5 percent after the flag carrier abandoned its bid for an estimated $1.1 billion stake in Korea Aerospace Industries (KAI). Shares in KAI , the country's sole aircraft maker, fell 3.6 percent on the news.
LG Household & Healthcare gained 2.9 percent after acquiring a Japanese firm to expand in the world's second largest beauty market.
Panel-maker LG Display rose 2.3 percent following two days of sharp losses.
Local institutions net purchased 687 billion won ($640.56 million) worth of KOSPI shares near mid-session, buttressing the index. Foreigners were also net buyers, but at a modest 366 million won.
The KOSPI 200 benchmark of core stocks was flat, while the junior KOSDAQ edged 0.8 percent lower. ($1 = 1072.5000 Korean won) (Reporting by Somang Yang; Editing by Richard Borsuk)