Seoul shares down; chipmakers lead fall

(Updates to mid-morning)

SEOUL, May 20 (Reuters) - Seoul shares traded lower on
Tuesday, led by techs such as Hynix Semiconductor after Hynix's
China DRAM plant was hit by a power outage and their US
counterparts voiced concerns about flagging consumer spending.

Shares in Hynix Semiconductor (000660.KS) fell 2.61 percent
to 29,800 won after the world's No.2 memory chip maker said on
Tuesday its China DRAM plant suffered a power outage on Monday,
disrupting its production of dynamic random access memory (DRAM)
chips.

No.1 memory chip maker Samsung Electronics (005930.KS) was
also down 1.51 percent to 717,000 won, tracking its Wall Street
peers' losses overnight after U.S. memory chip supplier Sandisk
(SNDK.O) said higher energy costs would hurt consumer spending
and take a toll on its earnings. The Nasdaq Composite Index
.IXIC closed down 0.50 percent lower on Monday.

The Korea Composite Stock Price Index was down 0.44 percent
to 1,877.24 points as of 0120 GMT, receding from Monday's 2008
peak just above 1,900 points.

"The market is facing resistence around the 1,900 level, and
some investors are locking in profits in the tech sector on the
back of its sharp gains this year," said Kim Joong-hyun, a market
analyst at Goodmorning Shinhan Securities.

The main index is not due for a deep correction as market
conditions in both South Korea and the U.S. are relatively
stable, analysts said, despite worryingly high oil prices.

"One thing that worries me, though, is there is a huge
outstanding balance of arbitrage accounts waiting to be
unleashed. Some volatility may come in June when the expiry of
futures takes place," Kim addded.

Refiners such as SK Energy (096770.KS) and GS Holdings
(078930.KS) continued to gain on expectations ongoing investments
in units producing higher-margin lighter oil products will pay
off. GS Caltex, a unit of GS Holdings, said Friday that it would
spend 2.94 trillion won on a hydrocracker.

SK Energy gained for a fourth-straight session, rising 2.94
percent to 122,500 won, and GS Holdings advanced for the second
consecutive session, up 2.52 percent to 44,700 won.

Some shipbuilders continued to rally on expectations demand
will continue to be robust on the back of solid growth in
emerging markets.

"Local shipbuilders are seeing growth in ships and plants
orders from overseas, particularly from oil-producing countries
amid the current rally in crude prices," said Han Byung-hwa, an
analyst at Hyundai Securities.

Hyundai Heavy Industries (009540.KS) inched up 0.52 percent
to 388500 won and Daewoo Shipbuilding & Marine Engineering
(042660.KS) gained 2.22 percent to 46,000 won.

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