Seoul stocks down on oil price; LG Display falls

(Updates to mid-morning)

SEOUL, March 13 (Reuters) - Seoul shares retreated on
Thursday after oil prices hit a record over $110 a barrel and
investors remained sceptical about the likely long-term impacts
of recent central bank cash injections into credit markets.

Declines were led by LG Display 34220.KS, which fell 7.2
percent to 43,150 won on news Dutch electronics giant Philips
(PHG.AS: Quote, Profile, Research, Stock Buzz) was selling $1 billion worth of shares in the firm on
Wednesday, cutting its stake to 13.2 percent from 19.9 percent.

Fuel-cost sensitive stocks in transportation titles such as
Korean Air Line (003490.KS: Quote, Profile, Research, Stock Buzz) retreated, after U.S. crude pierced
an all-time high of $110.20, before settling down at $109.92 a
barrel. Korean Air fell 4.55 percent to 58,500 won, and Asiana
Air 020560.KQ dipped 0.61 percent to 6,540 won.

The Korea Composite Stock Price Index was down 1.28 percent
at 1,637.80 points as of 0217 GMT.

"Perception that the U.S. Federal Reserve was just buying
time with the cash injections pervades the market. Investors are
aware that it has not helped solve the fundamental problems,"
said Kim Joon-kie, an analyst at SK Securities.

"Investors are taking a wait-and-see stance, as the U.S.
Federal Reserve is set to hold their interest rate meeting next
week, and as Wall Street banks release their earnings in the
coming weeks," he added.

Financials saw Kookmin Bank (060000.KS: Quote, Profile, Research, Stock Buzz) and Hana Financial
Group (086790.KS: Quote, Profile, Research, Stock Buzz) decline, shedding gains from the previous
session, as credit crunch concerns persist.

Kookmin Bank fell 0.35 percent to 56,300 won, and Hana
Financial Group dropped 2.32 percent to 40,050 won.

Shipbuilding shares fell across the board, with Hyundai Heavy
Industries Co Ltd (009540.KS: Quote, Profile, Research, Stock Buzz), the world's top shipbuilder,
losing 2.87 percent to 355,500 won, and Daewoo Shipbuilding and
Marine Engineering Construction Co (042660.KS: Quote, Profile, Research, Stock Buzz) dropping 1.72
percent to 31,400 won.

"Shipbuilders enjoyed an upward upward ride in the past
couple of days, and we are seeing the course reverse today. A
grim economic outlook has dampened the sentiment, as the slowdown
affects the ship orders," said Lee Jae-won, an analyst at Tong
Yang Investment Bank.

Some retail shares also fell on fears that higher crude
prices would put further strains on consumer spending, against a
background of already-high concern over inflationary pressures.

Hyundai Department Store (069960.KS: Quote, Profile, Research, Stock Buzz) dropped 4.53 percent to
84,300 won, and Lotte Shopping Co Ltd 023520.KS lost 0.83
percent to 299,000 won.

Meanwhile, exporter shares suffered on a private report
showing U.S. retail sales fell at the fastest pace in five years,
potentially tipping the fragile economy of South Korea's
second-largest export market towards recession.

Samsung Electronics Co Ltd (005930.KS: Quote, Profile, Research, Stock Buzz) fell 1.25 percent to
553,000 won, and LG Electronics Inc (066570.KS: Quote, Profile, Research, Stock Buzz) declined 2.6
percent to 111,000 won, ignoring a broker's note raising
earnings forecasts and target price for the company.

(Reporting by Park Jung-youn; Editing by Keiron Henderson)