Seoul stocks rise, led by financials

(Updates to mid-morning)

SEOUL, March 21 (Reuters) - Seoul stocks rose 0.8 percent
early on Friday, led by financials, as relaxed capital
requirements on the top two U.S. home finance companies
heightened hopes of an easing in the current credit crunch.

Gains were led by banking and brokerage shares, with Kookmin
Bank (060000.KS: Quote, Profile, Research, Stock Buzz) gaining 2.38 percent to 51,700 won, and Shinhan
Financial Group (055550.KS: Quote, Profile, Research, Stock Buzz) rising 2.87 percent to 48,350 won.

Analysts said lower capital limits on Fannie Mae and Freddie
Mac has allowed more cash to be pumped into the distressed U.S.
mortgage market, helping to stabilise it and easing fears of
further credit crunch.

"The stock market has regained some liquidity and investors
are snapping up much beaten down financial shares which have lost
excessively in recent months," said Koo Yong-wook, an analyst at
Daewoo Securities.

"The average price-to-book ratio of banks has fallen below 1;
valuation has not been this low for a while," he added.

Top brokerages also led the gains, with Samsung Securities
(016360.KS: Quote, Profile, Research, Stock Buzz) up 4.46 percent to 67,900 won, and Woori Investment &
Securities (005940.KS: Quote, Profile, Research, Stock Buzz) up 5.51 percent to 21,050 won.

"Brokerages and insurers pay out their dividends in late
March, and this has also helped stoke investors' appetite," Koo
added.

The Korea Composite Stock Price Index was up 0.82 percent at
1,636.89 points as of GMT.

"Companies dependent on imports are seen benefitting from
weaker oil prices, along with commodities that seem to be
reurning to more normal price levels after overshooting for a
while," said Yang Kyung-shik, an analyst at Hana Daetoo
Securities.

Transportation shares such as Korean Air Line and Asiana Air
rose on a continued sharp fall in oil price, with Korean Air
(003490.KS: Quote, Profile, Research, Stock Buzz) up 2.54 percent to 56,600 won and Asiana 020560.KQ
up 2.47 percent to 6,640 won.

Samsung Corp (000830.KS: Quote, Profile, Research, Stock Buzz) a South Korean trading and
construction company rose 2.03 percent to 65,300 won after news
that it had won a joint order worth $846 million in the United
Arab Emirates.

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