Seoul shares down on exporters; SK Networks up

* KOSPI falls 1.26 percent

* SK Networks up after SK Telecom network purchase

* Economic worries, stronger won weighs on exporters

(Updates to close)

By Jungyoun Park

SEOUL, May 22 (Reuters) - Seoul shares ended lower on Friday
after volatile trade, led by key technology and car exporters on
renewed economic worries, but SK Networks (001740.KS) rose after
an affiliate announced plans to buy its broadband network.

The Korea Composite Stock Price Index (KOSPI) ended
down 1.26 percent at 1,403.75.

"Investors are turning increasingly cautious after a batch of
economic data this week came out to be rather disappointing,"
said Yoo Soo-min, a market analyst at Hyundai Motor Securities.

"U.S. housing data due out next week will be closely
followed," Yoo said, adding that renewed worries about China's
economy, South Korea's largest trading partner, also weighed.

China's economic recovery may have slowed or even gone
slightly into reverse over the past month, two international
banks said in separate reports. [ID:nPEK371740]

Losses were led by technology and car exporters, which were
further pressured by the won's KRW= strength.

Samsung Electronics (005930.KS), the world's No.1 memory
chipmaker, ended 2.31 percent lower. Hynix Semiconductor
(000660.KS), the world's No.2, finished down 5.95 percent.

Hyundai Motor (005380.KS) finished down 3.6 percent.

News that the Obama administration was preparing to steer
General Motors GM.N into bankruptcy next week had limited
impact on car issues. [ID:nN21324883]

"General Motors' bankruptcy talks have been out there for a
while, so there is little surprise in this. In the short term,
there might be a shock as this will raise the number of layoffs,
which given the size of the company has some implication in
macroeconomic perspectives," said Cho Soo-hong, a market analyst
at Hyundai Securities.

"However in the medium term, South Korean carmakers may see
opportunities to increase market share in U.S. market, while GM
undergoes a massive changes after the bankruptcy," Cho added.

Doosan Heavy Industries & Construction (034020.KS) slid 4.21
percent on news one of its larger shareholders, Korea Development
Bank (KDB), may sell its stake in the firm.

State-owned KDB is moving to divest $450 million worth of
Doosan Heavy shares amid an upswing in the South Korean stock
market, sources familiar with the matter said on Friday.
[ID:nHKG75683]

SK Telecom (017670.KS) and SK Networks outperformed after
South Korea's top mobile carrier on Friday said it would buy a
network business for 892.9 billion won ($719.5 million) from its
sister company. [ID:nSEO65177]

The acquisition would save SK Telecom about 300 billion won
($241.7 million) in annual line-leasing costs, SK Telecom said in
a statement.

SK Telecom slipped 0.28 percent and SK Networks gained 1.03
percent.

Separately, SK Telecom is in negotiations to buy a stake in a
credit card unit that Hana Financial Group (086790.KS) is set to
launch, SK Group said on Friday. [ID:nSEO80402] Hana Financial
fell 0.52 percent.