Seoul shares tumble led down by exporters, banks

*Heavy industry issues fall on deepening slowdown concerns

*Exporters down weighed by U.S. worries

*Financials fall on revived credit fears

(Updates to midmorning)

By Park Jung-youn

SEOUL, Aug 19 (Reuters) - Seoul shares tumbled more than 2
percent on Tuesday with renewed U.S. credit market worries
sending exporters and financials such as Samsung Elec (005930.KS)
and Shinhan Financial Group (055550.KS) sharply lower.

The Korea Composite Stock Price Index was down 2.10
percent at 1,535.05 points as of 0155 GMT.

"Seoul shares are taking blows from renewed worries about
U.S. credit market fears, with a foreigners' selloff pulling the
index back sharply," said Won Jong-hyuck, a market analyst at SK
Securities.

Foreign investors were net-sellers of 104 billion won worth
of shares as of 0116 GMT.

"Meanwhile Chinese stock markets' steep losses since the
Olympics are also denting sentiment towards heavy industry issues
in steelmaking and shipbuilding sectors. There are worries that
Chinese economy may not grow as robustly after the Olympics," Won
added.

Financials such as Shinhan Financial Group (055550.KS) and
Woori Finance Holdings (053000.KS) dropped after the prospect of
more mortgage-related losses sent their Wall Street peers sharply
lower overnight.

Shinhan Financial Group was down 2.85 percent to 47,800 won
and Woori Finance Holdings was down 3.34 percent to 14,450 won.
Samsung Securities (016360.KS), South Korea's leading brokerage,
was down 3.45 percent to 64,300 won, and Mirae Asset Securities
(037620.KS) was down 4.23 percent to 99,600 won.

Exporters fell across the board, weighed down by the spectre
of a fresh credit crisis in South Korea's second-largest export
market, with Samsung Electronics (005930.KS), the world's No.1
memory chip maker, down 2.42 percent to 565,000 won and LG
Electronics, the world's No.4 handset maker, down 3.85 percent to
112,500 won. Hynix Semiconductor (000660.KS), the world's No.2
memory chip maker, fell 3.21 percent to 22,650 won.

South Korea's automakers were further led down by threats of
strike by its unionised workers, with unionised employees at
Hyundai Motor (005380.KS) set to walk out late on Tuesday if wage
negotiations fail to reach an agreement.

Hyundai Motor fell 3.06 percent to 69,700 won and Kia Motors
(000270.KS) lost 3.92 percent to 12,250 won.

Heavy industry shares in shipbuilding and steelmaking sectors
tumbled on worries about economy slowdown and on Chinese markets'
latest sharp losses, with Hyundai Heavy Industries (009540.KS)
down 4.38 percent to 262,000 won and Samsung Heavy Industries
(010140.KS) down 2.21 percent to 35,400 won.

World No.4 steel maker POSCO (005490.KS) was down 3.48
percent to 458,000 won weighed down further by prospects of
financing burdens of its potential bid for Daewoo Shipbuilding
and Marine Engineering, while Hyundai Steel (004020.KS) was down
2.75 percent to 56,500 won.

However shares in Doosan Construction (011160.KS), a unit of
Doosan Group, were up 1.27 percent to 7,950 won, continuing their
upward run after Doosan said on Monday it was dropping its bid
interest in Daewoo Shipbuilding.