Seoul shares slip; retailers, shipbuilders down

(Updates to mid-morning)

SEOUL, May 14 (Reuters) - Seoul shares traded slightly lower
on Wednesday as losses by retailers and shipbuilders outweighed
exporters' gains on continued weakness in the won currency.

Retailers such as Shinsegae (004170.KS) struggled on fears of
increased competition in the sector after unlisted E-Land said it
was in talks to sell its discount stores to British retailer
Tesco Plc's (TSCO.L) South Korean unit. [ID:nSEO280080]

Shinsegae shares dropped 4.92 percent to 580,000 won and
Lotte Shopping (023530.KS) fell 2.4 percent to 326,000 won.

Competition worries also continued to weigh on brokerage
houses after South Korea's financial regulator cleared the way
last Friday for new entrants in the industry.

Samsung Securities (016360.KS) fell 1.84 percent to 74,800
won and Woori Investment & Securities (005940.KS) dropped 3.06
percent to 22,200 won.

The Korea Composite Stock Price Index slid 0.11
percent to 1,840.86 points as of 0120 GMT.

"Shares are under pressure as record high oil prices continue
to fan inflation worries," said Bae Sung-young, a market analyst
at Hyundai Securities.

"The main index will hover at around 1,850 and will continue
to face some resistence at that level unless there are signs
consumer prices are cooling," Bae added.

But electronics issues such as LG Electronics (066570.KS) and
LG Display (034220.KS) rallied for a second day on expectations
the weak won currency will boost the competitiveness of their
products in overseas markets and help earnings grow steadily.

"Some investment houses are expanding their allocations in
shares like LG Elec that have a solid long-term earnings
outlook," said Steve Lee, an analyst at Goodmorning Shinhan
Securities.

LG Elec shares have gained 54 percent so far this year.

Meanwhile shares in shipbuilders came under pressure on
worries higher metal prices and a global economic slowdown may
dent their profits.

Hyundai Heavy Industries (009540.KS) fell 2.35 percent to
353500 won and Daewoo Shipbuilding & Marine Engineering
(042660.KS) lost 1.57 percent to 40,800 won.

Airlines also dropped after oil surged to a record peak near
$127 on Tuesday, raising worries about their operational costs.

Korean Air Line (003490.KS) fell 3.46 percent to 50,200 won
and Asiana Airlines (020560.KS) slipped 1.32 percent to 6,000
won.

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