Seoul shares lower on rate decision caution

*KOSPI inches down as investors await rate decision

*Financials lower on credit worries

*Airlines rise on easier oil

(Updates to midmorning)

By Park Jung-youn

SEOUL, Sept 11 (Reuters) - Seoul shares traded slightly lower
on Thursday as caution pervaded the market ahead of a Bank of
Korea interest rate decision and futures and options expiries,
but gains on Wall Street and easier oil lent support.

The Korea Composite Stock Price Index was down 0.23
percent to 1,462.78 points as of 0045 GMT.

"As options and futures expiries fall today, we are seeing
selling from program accounts drizzling out this morning, sending
shares lower," said Pyun Joon-ho, a market analyst at Kyobo
Securities.

"Meanwhile the uncertainties surrounding Lehman Brothers are
fueling foreign selling." Pyun added.

Foreign investors were net sellers of 52 billion won ($47.65
million) worth of shares listed on the main board.

Banking issues including Kookmin Bank 060000.KS and Shinhan
Financial Group (055550.KS) retreated on persistent credit
worries after troubled U.S. investment bank Lehman Brothers
reported an unexpectedly large quarterly loss and set an asset
sales plan that left investors sceptical [ID:nLA171292].

Kookmin Bank was down 2.48 percent to 58,900 won and Shinhan
Financial Group was down 2.53 percent to 48,250 won. Hana
Financial Group (086790.KS) declined 2.78 percent to 36,700 won,
while Woori Finance Holdings (053000.KS) lost 2.01 percent to
14,650 won.

However airlines rose after U.S. crude CLc1 fell to around
$102 per barrel on Wednesday, with Korean Air Line (003490.KS)
gaining 1.22 percent to 41,500 won. Tourism issues also
rebounded, with Hana Tour (039130.KQ) up 4.88 percent to 25,800
won and Mode Tour (080160.KQ) up 3.31 percent to 15,600 won.

Technology issues rose after their latest losses, with
Samsung Electronics (005930.KS) advancing 0.92 percent to 547,000
won and LG Electronics (066570.KS) inching up 0.61 percent to
98,400 won.

Shares in LG Display (034220.KS) traded firm, up 1.94 percent
higher at 28,950 won, despite the firm's announcement of
third-quarter outlook cuts. LG said the price of liquid crystal
display (LCD) panels had dropped more than expected, in another
sign of a deepening downturn in the tech sector.[ID:nSEO314649]

Meanwhile shares in Kumho Asiana Group units rallied after a
local media report that the group was considering selling a stake
in unlisted Kumho Life Insurance.

Analysts said the reports of the group's stake sale interest
had allayed worries about its liquidity that had brought
group-related shares lower in recent weeks.

Kumho Industrial (002990.KS) jumped 7.6 percent to 18,400 won
and Kumho Tire (073240.KS) was trading 4.41 percent higher at
8,290 won.

($1=1091.2 Won)