Seoul stocks steady on earnings expectations

(Updates to mid-morning)

SEOUL, March 31 (Reuters) - Seoul stocks were treading water
by midmorning on Monday, with gains in technology shares fuelled
by prospects of solid first-quarter earnings undermined by
financials and carmakers.

Samsung Electronics (005930.KS: Quote, Profile, Research, Stock Buzz), the world's largest memory
chip maker, gained 1.79 percent 624,000 won, on expectation that
its earnings would be boosted by strong results in its liquid
crystal display unit.

"In addition to solid results from its LCD division, the
memory chip sector has hit the bottom and is expected to perform
better from the second half of this year," said Kim Seong-bong, a
market analyst at Samsung Securities.

Kim added that South Korean handset makers also posted strong
sales, in contrast to international competitors such as Motorola.

Meanwhile smaller home rival LG Electronics (066570.KS: Quote, Profile, Research, Stock Buzz) fell
3.85 percent to 125,000 won as investors chose to cash in profits
following a record high of 130,000 won reached on Friday.

LG Elec gained 14.5 percent from 113,500 won on March 24 to
130,000 on March 28, fuelled by earnings expectations.

The Korea Composite Stock Price Index was down 0.4 percent
to 1,704.28 points as of 0149 GMT.

Carmakers such as Hyundai Motor (005380.KS: Quote, Profile, Research, Stock Buzz) and Kia Motors
(000270.KS: Quote, Profile, Research, Stock Buzz) fell after central bank data earlier Monday showed
April manufacturing sentiment slipped due to high material prices
and weak domestic demand. [ID:SEO7031]

Hyundai fell 0.51 percent to 78,100 won and Kia declined 0.87
percent to 11,350 won.

Financials such as Kookmin Bank (060000.KS: Quote, Profile, Research, Stock Buzz) and Shinhan
Financial Group (055550.KS: Quote, Profile, Research, Stock Buzz) declined on concerns over first-
quarter earnings, which analysts expect to be weak due to
lingering margin pressure and shrinking fund sales fees.

Kookmin fell 0.72 percent to 55,500 won, and Shinhan shed
0.57 percent to 52,200 won.

"Financials are lagging their technology index peers on the
back of comparatively weaker earnings outlook," said Im Il-song,
an analyst at Meritz Securities.

"Net interest margins have fallen, and fund sale was also
slow due to the stock market downturn this year," he added.

Brokerages also retreated across the board on persistent
worries about credit markets, with Woori Investment & Securities
(005940.KS: Quote, Profile, Research, Stock Buzz) down 1.42 percent to 20,900 won and Daewoo Securities
(006800.KS: Quote, Profile, Research, Stock Buzz) down 0.92 percent to 21,550 won.

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