Seoul stocks jump 2.4 pct; Kookmin leads rally

(Updates to mid-morning)

SEOUL, March 19 (Reuters) - Seoul shares rose 2.4 percent on
Wednesday led by banks after a sizeable U.S. interest rate cut
and solid results from top U.S. investment banks soothed investor
nerves jangled by Sunday's Bear Stearns fire-sale.

Financial firms such as Kookmin Bank 060000.KS and Woori
Finance Holdings (053000.KS) advanced, tracking their U.S. peers
and pulling back up after steep losses in recent sessions.

Kookmin gained 2.24 percent to 50,200 won, backing away from
Tuesday's near-three-year low, while Woori rose 2.88 percent to
16,050 won.

The Fed cut its benchmark interest rate by three-quarters of
a percentage point to 2.25 percent, its lowest level since
February 2005. [ID:N17621242]

Stronger-than-expected earnings by Goldman Sachs (GS.N) and
Lehman Brothers LEH.N boosted Wall Street shares, driving the
S&P 500 and Nasdaq up by more than 4 percent. The S&P index of
financial shares .GSPF achieved its best day in eight years,
climbing 8.5 percent. [ID:N18217198]

The Korea Composite Stock Price Index was up 2.4 percent at
1,626.77 points as of 0158 GMT.

"Lehman Brothers' earnings came out better than forecast, and
reassured investors that the U.S. financial system may not be
necessarily heading for deeper credit troubles," said Lee
Sun-yeob, an analyst at Goodmorning Shinhan Securities.

China, South Korea's largest export market, raised its bank
reserve ratio by 0.5 percentage point to 15.5 percent on Tuesday,
in a milder than expected monetary tightening, which Lee said was
stoking appetite for shares.

Shipbuilders such as Hyundai Heavy Industries (009540.KS) and
Daewoo Shipbuilding and Marine Engineering (042660.KS) also rose
on optimism about their earnings.

Hyundai Heavy went up 5.34 percent to 345,000 won while
Daewoo jumped 7.12 percent to 31,600 won after it said to the
Korea Exchange that its monthly operating profit in February
surged 318 percent from the previous year.

Meanwhile the South Korean won rose about 1 percent against
the U.S. dollar on Wednesday after the Vice Finance minister said
that won's value was in the process of becoming normalised after
being overvalued. [ID:SEO304134]

Shares that are sensitive to imported raw materials prices
such as steelmakers gained, with POSCO (005490.KS) up 2.89
percent to 463,500 won and Hyundai Steel (004020.KS) up 2.52
percent to 69,200 won.
(Reporting by Park Jung-youn; Editing by Marie-France Han and
Keiron Henderson)