Seoul shares fall 1 pct; Hyosung up on Hynix news

* KOSPI falls 1.1 pct on retail investor selloff

* Volatile trade after VIX hits 4-mth high

* Hyosung rallies on news of Hynix bid extension request

(Updates to mid-morning)

By Jungyoun Park

SEOUL, Nov 2 (Reuters) - Seoul shares retreated on Monday after big falls on Wall Street, with losses led by key blue chips including POSCO (005490.KS), but Hyosung (004800.KS) rose on news it requested an extension of the deadline for its Hynix bid.

Analysts said volatility would likely continue driving markets as investors grow concerned about the global economic outlook and corporate earnings in the fourth quarter.

"We are seeing investors avoiding riskier assets amid worries the rate at which economies and earnings pick up in the fourth quarter may not be as strong as hoped," said Won Jong-hyuck, a market analyst at SK Securities.

Data released on Sunday showed South Korean exports fell less than expected in the first month of the fourth quarter, but weak U.S. demand reinforced concerns a broad-based recovery in the global economy is not fully secured. [ID:nSEO73164]

The Chicago Board Options Exchange Volatility Index .VIX rocketed 23.95 percent to 30.69 points on Friday, its highest since July.

"The KOSPI still has relatively firm support at the 1,500-1,550 point range. And there is no doubt that fundamentals are on track for a recovery," Won added.

The Korea Composite Stock Price Index (KOSPI) was down 1.11 percent at 1,563.21 points as of 0115 GMT.

Shares in Hyosung Corp (004800.KS) rose 3.3 percent after the company said on Sunday that it had asked for an extension of the deadline for its bid to take over Hynix Semiconductor (000660.KS), adding to market expectations it may drop its bid for the chipmaker.

But key blue chips fell, with POSCO (005490.KS), the world's No.4 steelmaker, losing 2.18 percent, and Hyundai Motor (005380.KS), South Korea's top automaker, shedding 3.65 percent.

Shares in Samsung Securities (016360.KS) fell 1.5 percent after South Korea's top brokerage by market value reported late on Friday that its quarterly net profit almost doubled from a year ago, but the figures came below market consensus due to losses from bond investments. [ID:nSEO295844]

"We have been waiting for changes to take place at Samsung Securities ... but it has been slow. In the meantime, Daewoo Securities is expected to strengthen its [corporate financing] capabilities," said Chung Bo-seung, an analyst at Hanwha Securitie.