Seoul stocks gain 0.4 pct as shipbuilders rally

(Updates to mid-morning)

SEOUL, Feb 12 (Reuters) - Seoul stocks rose 0.4 percent on
Tuesday, recouping part of the sharp losses from the previous
session, as battered shipbuilders rallied after big orders eased
worries that slowing global growth would hit orders growth.

But financials such as Kookmin Bank (060000.KS: Quote, Profile, Research, Stock Buzz) continued to
be haunted by fears over the subprime mortgage crisis' impact on
the financial sector, capping a broader recovery.

Investors also remained cautious, looking ahead to U.S.
January retail sales data due out on Wednesday for further clues
as to how much the global credit crisis is hurting the world's
largest economy, also South Korea's second-biggest export market.

"There's not enough momentum to push up markets, with
foreigners continuing to sell and U.S. economic worries remaining
unabated," said Bae Sung-young, an analyst at Hyundai Securities.

"I think the index will be locked in a 1,600-1,700 point
range for a while, cycling between ups and downs according to
global markets."

The Korea Composite Stock Price Index was 0.43
percent higher at 1,647.65 points as of 0128 GMT, after slumping
3.3 percent on Monday.

Hyundai Heavy Industries Co (009540.KS: Quote, Profile, Research, Stock Buzz), the world's largest
shipbuilder, jumped 4.2 percent to 347,500 won, after saying late
on Monday it had won a 1.28 trillion won ($1.35 billion) order to
build eight very large container ships. [ID:nSEL000301]

Daewoo Shipbuilding & Marine Engineering (042660.KS: Quote, Profile, Research, Stock Buzz) also
added 3.63 percent to 35,700 won after its construction unit said
late on Monday that was set to win a $20 billion order from Oman.
[ID:nSEO290567]

The latest series of orders eased worries that the credit
market strain would choke off funds for new vessels and projects,
lifting the recently beaten-down sector.

But lenders kept losing ground, with top lender Kookmin Bank
(060000.KS: Quote, Profile, Research, Stock Buzz) falling 0.69 percent to 57,700 won and second-ranked
Shinhan Financial Group (055550.KS: Quote, Profile, Research, Stock Buzz) slipping 1.42 percent to
48,700 won.

(Reporting by Kim Soyoung; Editing by Keiron Henderson)