KOSPI falls as financials drag; Kookmin down

(Updates to mid-morning)

By Park Jung-youn

SEOUL, June 5 (Reuters) - Seoul shares traded lower on
Thursday pressured by financials such as Kookmin Bank 060000.KS
on revived worries about credit losses, but chipmakers such as
Hynix Semiconductor held firm on a positive outlook.

Samsung Electronics (005930.KS), the world's No.1 memory
chipmaker, and Hynix Semiconductor (000660.KS), the No.2, firmed
after their U.S. peers rallied on positive brokerage comments
overnight, lifting the U.S. index of semiconductor shares .SOXX
1.32 percent.

Samsung Elec rose 0.14 percent to 714,000 won and Hynix
gained 3.47 percent to 31,300 won.

However financials such as Kookmin Bank and Shinhan Financial
Group 05550.KS declined as market sentiment towards banking
shares worsened on concerns about fresh credit losses on recent
talk of Lehman Brothers' LEH.N capital problems.

The Korea Composite Price Index was down 0.52 percent to
1,824.33 points as of 0103 GMT.

"Market sentiment is skittish as investors wait for U.S.
banks' results this month." said Kim Seung-han, a market analyst
at CJ Investment & Securities.

"Eyes will be on the extent of their losses. If results come
out better than the marekt had feared, that bodes well for the
Seoul's stock market. With oil easing lately, we may see a relief
rally if things turn out okay," Kim added.

KOOKMIN DOWN

Kookmin fell 0.63 percent to 63,500 won and Shinhan Financial
lost 1.5 percent to 49,250 won.

"The subprime issue may have cooled investor appetite, but I
think the real reason behind the banks' sluggish share
performance is their lack of earnings momentum," said J.P.Hong,
an analyst at Goodmorning Shinhan Securities.

Separately, a Wall Street Journal report said on Wednesday
that Lehnman was looking to Korean investors for capital, naming
Woori Finance Holdings (053000.KS) and Korea Development Bank as
its mostly likely options.

"As far as I know, Woori Finance has seen some decreases in
its capital. I am not so sure if it would be able to make a
meaningful investment in a U.S. investment bank," Hong added.

Woori shares were down 2.9 percent to 18,150 won.

Energy price-sensitive transportation issues such as Korean
Air Line (003490.KS) and Asiana Airlines (020560.KS) also
advanced after oil fell more than $2 on Wednesday. U.S. crude
CLc1 settled at $122.30 a barrel.

Korean Air was up 1.5 percent to 54,300 won Asiana Airlines
rose 1.87 percent to 5,990 won.

Shares in Doosan Heavy Industries (034020.KS) rose 4.72
percent to 122,000 won after news that it has won a nuclear power
plant equipment order worth 200 billion won from the United
States. [ID:nSEL000120]