Seoul stocks decline led by energy, steelmakers

(Updates to mid-morning)

SEOUL, March 20 (Reuters) - Seoul stocks opened 1.23 percent
lower on Thursday, led by energy shares affected by a more than 4
percent drop in oil prices overnight and financials hit by
another spate of credit worries.

Top South Korean refiner SK Energy (096770.KS: Quote, Profile, Research, Stock Buzz) lost 4.29
percent to 100,500 won and smaller rival S-Oil (010950.KS: Quote, Profile, Research, Stock Buzz)
dropped 1.94 percent to 60,500 won.

Steelmakers also fell after a steep fall in commodities
prices heightened worries about global economic slump and the won
currency's continued weakness.

POSCO (005490.KS: Quote, Profile, Research, Stock Buzz) lost 3.53 percent to 451,500 won, and
Hyundai Steel (004020.KS: Quote, Profile, Research, Stock Buzz) fell 2.14 percent to 68,500 won.

"Worries about a global slowdown were the main reason behind
the fall in commodities prices yesterday, which does not bode
well for the stock market. Investors are expecting demand for
industrial goods to drop in the face of a possible global
economic downturn," said Kim Joon-kie, an analyst at SK
Securities.

"Fundamentals are in question here, and investors are selling
shares to cash in on their profits," he added.

The South Korean won fell more than half a percent against
the dollar early on Thursday, although the decline was limited on
speculation of possible dollar-selling intervention by the
government. [ID:SEO333405]

The Korea Composite Stock Price Index was down 1.65 percent
at 1,595.42 points as of 0138 GMT.

Financial firms such as Woori Finance Holdings (053000.KS: Quote, Profile, Research, Stock Buzz)
also retreated after speculation that Merrill Lynch & Co Inc
(MER.N: Quote, Profile, Research, Stock Buzz) may see more loan losses revived credit worries.

Woori Finance fell 2.5 percent to 15,600 won and Hana
Financial Group (086790.KS: Quote, Profile, Research, Stock Buzz) shed 3.03 percent to 36,800 won.

However transportation stocks were boosted by the fall in oil
prices, with Korean Air Line (003490.KS: Quote, Profile, Research, Stock Buzz) advancing 4.1 percent to
55,800 won and Asiana Air 020560.KQ up 3.48 percent to 6,550
won.

(Reporting by Park Jung-youn; Editing by Marie-France Han )