REFILE-Seoul shares fall led by ailing shipping sector

(Refiles to clarify milestones, quote in 8th, 9th paragraph)

(Updates to mid-morning)

SEOUL, June 13 (Reuters) - Seoul shares failed to maintain
upward momentum on Friday after opening nearly 1 percent higher,
with losses by shipping issues on a near-9 percent fall in the
Baltic Dry Index .BADI overnight outweighing gains by techs.

Shipping shares such as Hanjin Shipping (000700.KS) and Korea
Line (005880.KS) tumbled after the Baltic Dry Index lost 8.67
percent on Thursday, as rising inflation pressure and currency
volatility in the region convinced many investors that shipping
demand to and from Asia's emerging markets may cool.

Hanjin Shipping fell 5.4 percent to 40,300 won and Korea Line
plunged 9.28 percent to 176,000 won.

Shipbuilders also lost ground, with Hyundai Heavy Industries
(009540.KS) losing 4.39 percent to 327,000 won and STX
Shipbuilding (067250.KS) sliding 5.71 percent to 33,000 won.

"Investors are getting increasingly uneasy about shipping
demand globally, particularly from China," said Suh Jin-hee, an
analyst at SK Securities.

Separately, analysts said a strike by South Korea's unionised
truckers added to the downward pressure on shipping issues, as it
will make delivering goods to ports more challenging.

"However the impact from the strike will not be lasting, as
finished export goods will have to be shipped out at some point.
It is only a matter of time," Suh said.

The Korea Composite Stock Price Index was down 0.31
percent to 1,734.05 points as of 0119 GMT, nearly 9 percent off
the year's intraday high of 1,901 reached in mid-May after
initially recovering some of the prior session's 2 percent drop.

"We (saw) some rebound, helped in part by the U.S. retail
data," said Bae Sung-young, a market analyst at Hyundai
Securities.

"However overriding macroeconomic factors remain grim, with
oil's persistent strength and inflation pressure amid a global
economic slowdown," Bae said, adding that he expects the index to
be volatile for sometime.

Tech firms outperformed the wider market, with Samsung
Electronics (005930.KS), the world's No.1 memory chip maker, rose
2.56 percent to 680,000 won and Hynix Semiconductor (000660.KS)
climbed 0.34 percent to 29,300 won, after strong-than-expected
May U.S. retail sales raised hopes that electronics exports would
also come out solid. [ID:nN12284073]

Chipmakers were also helped by news that wireless chip
developer Qualcomm Inc (QCOM.O) raised its outlook for the June
quarter and full year on Thursday amid higher demand for advanced
mobile phones [ID:nN12331541].

However LG Electronics (066570.KS) fell 1.5 percent to
131,500 won after the Financial Times reported on Thursday that
it was considering a bid for General Electric's (GE.N) appliance
business [ID:nSEO24474].

Steelmakers such as POSCO (005490.KS) and Hyundai Steel
(004020.KS) fell on worries that inflation and slowing Asian
economies may affect steel demand, analysts said.

"Negative market factors have coincided with seasonal
factors. Summer is a slow season for the steel industry," Kim
Gyung-jung, an analyst at Samsung Securities, said.

POSCO lost 1.47 percent to 536,000 won and Hyundai Steel
dropped 1.15 percent to 77,500 won.

GS Construction (006360.KS) rose 0.83 percent to 121,000 won
after the company said on Friday that a consortium it was part of
won a contract worth about $900 million to build a refinery plant
in Russia [ID:nSEO22166].