* Foreigners turn net buyers after 10 days of selling
* China flash PMI shows activity shrank in March for 5th month
By Christine Kim
SEOUL, March 24 Seoul shares inched up early Monday, supported by foreign investors who turned net buyers after a selling spree, but the gains were tightly capped by a China factory survey that spurred some fresh concern about a possible slowdown there.
The Korea Composite Stock Price Index (KOSPI) was up 0.4 percent at 1,942.71 points as of 0207 GMT.
Although local shares reached a near two-week high shortly after markets opened, some gains were erased after a preliminary private survey of China's factories in March showed activity shrank for a fifth straight month.
The survey showed new export orders grew for the first time in four months and the employment sub-index showed a substantial increase, lending some relief to investors.
"There are persistent concerns over sluggish growth in China, but at the same time hopes have been formed in the market for government measures to shore up growth. Taking past history into consideration, these hopes are not ungrounded," said Cho Byung-hyun, a market analyst at Tong Yang Securities.
Meanwhile, tensions in Ukraine are expected to have a limited impact on local markets despite the fluid situation there, Cho added.
Offshore investors were net buyers of 32.9 billion won ($30.46 million) worth of local shares near mid-session.
Chemicals, shipbuilders and steelmakers advanced on hopes of additional economy-boosting measures from the Chinese government following the survey.
LG Chemical Ltd rose 3.6 percent and Lotte Chemical Corp was up 3.9 percent.
Daewoo Shipbuilding & Marine Engineering Co Ltd rose 4.3 percent and Hyundai Heavy Industries edged up 1.5 percent.
Posco and Hyundai Steel Co rose 1.4 percent and 3.5 percent respectively.
Advancers narrowly outnumbered decliners 393 to 386.
The KOSPI 200 benchmark of core stocks was up 0.5 percent, while the junior KOSDAQ was flat in early trade. ($1 = 1080.2500 Korean Won) (Editing by Richard Borsuk)