Seoul shares down; exporters hit by U.S. outlook

(Updates to mid-morning)

SEOUL, May 22 (Reuters) - Seoul shares retreated on Thursday
led by exporters such as Hyundai Motor (005380.KS), after surging
oil prices and further signs of a U.S. economic slowdown sent
Wall Street shares tumbling overnight.

Major tech firms such as Samsung Electronics (005930.KS) and
LG Display (034220.KS) declined on fresh worries about South
Korea's second-largest export market after the U.S. Federal
Reserve on Wednesday slashed its growth forecast for 2008, adding
that it expected inflation to remain "elevated" and unemployment
to increase "significantly."[ID:nN21438129]

Samsung Electronics fell 0.56 percent to 714,000 won and LG
Display declined 2.09 percent to 44,400 won.

The Korea Composite Stock Price Index was down 1.42
percent at 1,821.23 points as of 0111 GMT, headed for a
fourth-consecutive losing session and off more than 4 percent
from its 2008 peak over 1,900 reached on Monday.

"Inflation worries on the back of record oil prices, and the
market's sharp gains this year are putting shares under
pressure," said Kim Hak-kyun, a market analyst at Korea
Investment & Securities.

"The fact that the commodities rally is not simply from U.S.
dollar weakness but also from fundamental worries about supplies
is the key concern and is weighing heavily on market sentiment,"
Kim added.

Analysts said however that the main index will not likely
fall below 1,800 as corporate earnings, particularly those of
technology firms, are still expected to be relatively solid this
year on continuing healthy demand from emerging markets.

"Even the struggling U.S. economy may perk up a bit by the
late second-half," said Park Suk-hyun, a market analyst at Eugene
Investment & Securities.

Carmakers such as Hyundai Motor declined on the back of
worries about consumer spending amid mounting inflationary
presure, and after news on Wednesday that the some shareholders
sued Hyundai Motor Group's chairman and another executive,
seeking compensation for losses at the company.[ID:nSEO142556]

Hyundai Motor fell 2.33 percent to 83,900 won and Kia Motors
(000270.KS) dropped 2.01 percent to 12,200 won.

Refiners such as SK Energy (096770.KS) were hit by concerns
about thinning refining margins after U.S. crude CLc1 climbed
to a record of over $134 a barrel on Wednesday.[ID:nSP114922].

SK Energy fell 2.94 percent to 115,500 won and GS Holdings
(078930.KS) declined 3.28 percent to 44,250 won.

Transportation issues such as Korean Air Line (003490.KS) and
Asiana Airlines (020560.KS) also declined on fear higher energy
costs could dent their profits.

Korean Air Line fell 4.47 percent to 49,100 won and Asiana
Airlines lost 3.37 percent to 5,730 won.

(Reporting by Park Jung-youn; Editing by Jonathan Hopfner)