* Autos rally: Hyundai Motor up 2 pct, Kia Motors up 2.6 pct
* Construction stocks, financials also lift the main index
* Institutional, offshore investors net buyers
SEOUL, Jan 21 Seoul shares drifted higher on Tuesday morning as fears of a decline in China's economy waned and its money markets eased, but gains were capped as investors awaited domestic corporate earnings reports and policy clues from the Bank of Japan.
The Korea Composite Stock Price Index (KOSPI) was up 0.4 percent at 1,961.58 points as of 0229 GMT.
"The Chinese economy and domestic corporate results are factoring as the two biggest risk variables as of now," said Ko Seung-hee, an analyst at SK Securities. "Remarks about the Chinese economy have been bullish in the past two days - that's something to cheer about before the corporate results later in the week."
On Monday, data showed China's economy grew 7.7 percent in 2013, outperforming the government's target of 7.5 percent, and
China's central bank 7-day bond repurchase rate fell to 5.25 percent from 6.60 percent on Monday, after People's Bank of China injected 225 billion yuan.
Analysts said the Bank of Japan's two-day policy meeting ending on Wednesday would be closely watched because its decisions directly correlate to the speed of the yen's movements.
With big names such as Samsung Electronics and Hyundai Motor set to announce their corporate results later in the week, large caps lifted the KOSPI 200 benchmark of core stocks up 0.6 percent, outpacing the gains in the wider market.
Automakers Hyundai Motor Co and Kia Motors Corp advanced 2 percent and 2.6 percent, respectively. Autoparts maker and affiliate Hyundai Mobis Co Ltd gained 1.9 percent.
Construction and bank shares outperformed as well, with GS Engineering & Construction Co Ltd and Shinhan Financial Group Co Ltd rising 4.5 percent and 2.4 percent, respectively.
Meanwhile Hite Jinro dropped 2.6 percent to its lowest price level in 1-1/2 years on concerns about future earnings following news its market rival Oriental Brewery Co Ltd (OB) had been bought back by Anheuser-Busch InBev SA, which is attempting to capture a bigger share of the region's growing market.
Institutional and offshore investors net-purchased a combined 50 billion won ($47 million) worth of KOSPI shares near mid-session. ($1 = 1063.6500 Korean won) (Reporting by Jungmin Jang; Editing by Eric Meijer)