Seoul shares gain, POSCO up as mulls price hike

(Updates to mid-morning)

SEOUL, April 3 (Reuters) - Seoul stocks were firm at
midmorning on Thursday touching an 11-week intraday high, boosted
by techs, while POSCO (005490.KS) jumped as it said it was
considering raising steel prices and bidding for a shipbuilder.

The world's fourth-largest steelmaker stood 3.6 percent
higher at 495,500 won, while others in the sector advanced on the
prospect of higher prices.

"Everyone has been waiting for POSCO to clarify when and by
how much the price of its steel products will rise," said Kim
Hyun-tae, an analyst at Goodmorning Shinhan Securities.

If POSCO raises its price, others in the sector will quickly
follow suit, he added. Dongbu Steel (016380.KS) rose 7.27 percent
to 11,800 won and Dongkuk Steel (001230.KS) advanced 3.49 percent
to 38,500 won.

POSCO shares were further boosted by the company's comment
that it was interested in bidding for Daewoo Shipbuilding &
Marine Engineering (042660.KS).

"Acquisition of Daewoo will be positive to POSCO in the long
term, in that the company can diversify its portfolio of
businesses using a huge pile of cash it's got. Also it will grant
almost an exclusive rights of sale to Daewoo," Kim of Goodmorning
Shinhan added.

By 0123 GMT the Korea Composite Stock Price Index was up 0.54
percent to 1,751.68 points, bringing its gains since March 27 to
4.4 percent, as credit market worries ease and foreign investors
continued to buy after a long spate of selling.

Foreigners bought 44 billion won worth of shares and
institutions bought 75 billion won worth of shares.

"Investors are now more focused on potentially positive
factors rather than negative factors, as was seen in the recent
relief rally after huge writedowns by UBS for instance," said Lee
Sun-yeon, a market analyst at Goodmorning Shinhan Securities.

"Also the view is that the U.S. economic slowdown will not be
as sharp as previously feared," he added.

LG IN DEMAND

Technology titles such as LG Electronics (066570.KS) and LG
Display (034220.KS) met strong demand as investors rerated their
view of earnings prospects, with LG Electronics up 4.6 percent to
136,500 won and LG Display up 2.24 percent to 47,850 won.

"Handset sales have particularly been robust in overseas
markets on the company's sleek design and aggressive marketing,"
said Kevin Lee, an analyst at Woori Investment & Securities.

"News of Motorola's spinoff also firmed LG Elec's position as
a frontrunner in handset market, which combined with rosy
earnings have been lifting the shares lately," he added.

Among the isolated fallers, Kookmin Bank 060000.KS lost
1.87 percent to 63,000 after it said it had cut the size of its
proposed Samurai bond issue to 10 billion yen from the planned 30
billion. It had previously delayed the bond issue plan.

South Korea's biggest car maker Hyundai Motor (005380.KS)
dipped 0.12 percent to 81,000 won after its chairman said he was
worried over demand in the United States, which has been falling
due to higher fuel prices.

Shares in affiliate Kia Motors (000270.KS) fell 0.44 percent
to 11,400 won.

(Reporting by Park Jung-youn; Editing by Keiron Henderson)