* Foreign buying, banks send KOSPI higher
* Daewoo Shipbuilding falls on profitability worries
* Hitejinro, Halla rally on MSCI index addition
SEOUL, May 16 Seoul shares rose on Thursday
aided by foreign investor buying following rallies on Wall
Street, with solid gains in banks boosting sentiment, but falls
in shipyards including Daewoo Shipbuilding & Marine Engineering
"The market is turning around as optimism is growing that
efforts by global governments including South Korea's to
stimulate the economy will pay off," said Lee Jae-mahn, a market
analyst at Tong Yang Securities.
Signs the yen's weakness may slow were also helping to
support Seoul's share market, analysts said.
The dollar hit a 4-1/2-year high earlier on Wednesday, but
its gains were pared during the North American session on
falling U.S. Treasury bond yields. Yields move inversely to
The Korea Composite Stock Price Index was up 0.64
percent at 1,983.97 points at 0132 GMT.
Foreign investors were buyers of a net 94.6 billion won
worth of stocks.
Banks led gains, as Shinhan Financial Group rose
3.8 percent and Hana Financial Group advanced 3.2
Exporters also traded firmer, with Hyundai Motor
gaining 1 percent and LG Display rising 1.7 percent.
But Daewoo Shipbuilding & Marine Engineering
tumbled after the South Korean shipbuilder said late on
Wednesday its first quarter operating profit fell more than 50
percent from a year ago.
"Profits came out poorly despite relatively smaller
allowance for bad debts," pointing to falling profitability of
its ship orders, said Han Young-soo, an analyst at Samsung
Daewoo Shipbuilding shares were the most-heavily traded
share on the main KOSPI.
Other shipyards also weakened, with Hyundai Heavy Industries
down 0.2 percent and STX Offshore & Shipbuilding
falling 1.5 percent.
Shares in Hitejinro Co Ltd and Halla Visteon
rallied after MSCI Inc added the firms to
its South Korea index.
Hitejinro, a brewery and liquor maker, and Halla Visteon, an
auto parts maker, advanced 5.7 percent and 3.2 percent,
But Mando, which was dropped from the index,
fell 2.6 percent.
The KOSPI 200 benchmark of core stocks was up 0.8
percent, while the junior KOSDAQ edged 0.16 percent
(Reporting by Jungyoun Park; Editing by Jacqueline Wong)