Seoul stocks erase losses, chip makers turn higher

(Updates to early afternoon)

SEOUL, Jan 9 (Reuters) - Seoul stocks erased early losses to
trade almost flat on Wednesday, boosted by chip makers such as
Hynix Semiconductor after Hynix's chief executive forecast a
near-term recovery in the embattled computer memory chip market.

The Korea Composite Stock Price Index rose 0.02
percent to 1,826.63 points as of 0445 GMT, after earlier falling
as much as 1.8 percent to its lowest level since Nov. 27.

Hynix Semiconductor Inc (000660.KS), the world's
second-biggest maker of memory chips, jumped 3.25 percent to
23,850 won after its chief executive said at the Consumer
Electronics Show in Las Vegas he expects a rebound in the chip
market in the second quarter of this year. [ID:nSEO31339]

Bigger rival Samsung Electronics Co Ltd (005930.KS) gained
2.13 percent to 527,000 won, reversing earlier losses triggered
after AT&T's (T.N) warning of soft consumer spending fanned
concerns about a U.S. recession.

But financials including Kookmin Bank 060000.KS retreated
after bankruptcy rumours surrounding top U.S. mortgage lender
Countrywide Financial CFC.N stirred concerns about a deeper
fallout from the subprime mortgage meltdown. [ID:nN08507296]

Top lender Kookmin Bank was down 1.57 percent at 62,700 won
and Hana Financial Group (086790.KS) eased 1.73 percent to 48,350
won.
(Reporting by Kim Soyoung; Editing by Sei Chong)