Seoul shares flat; investor caution before FOMC

(Updates to mid-morning)

By Park Jung-youn

SEOUL, June 25 (Reuters) - Seoul shares traded flat on
Wednesday after four consecutive losing sessions, but a report on
declining U.S. consumer confidence, and higher oil continued to
weigh on exporter issues such as Hyundai Motor (005380.KS).

The Korea Composite Stock Price Index was down 0.07 percent
to 1,709.65 points as of 0100 GMT, potentially heading for a
fifth straight losing session, with foreign investors on course
to make net sales for a 13th consecutive trading day.

Should the KOSPI end lower on Wednesday it will be the
longest run of losses since a 6-day losing streak to May 26.

"There is not much buying in the market as investors wait for
the interest rate decision and follow-up comments from the U.S.
Fed," said Juhn Chong-kyu, a market analyst at Samsung
Securities.

"But the index will likely hold firm at around 1,700 unless
there is an outbreak of another financial debacle," Juhn added.

LG Electronics (066570.KS) fell 1.59 percent to 123,500 won
after Nomura Securities cut its target price on the world's No.4
handset marker citing a potential slowdown in handset shipments.

"The global handset market is losing momentum as price
competition intensifies and shipment growth declines," said Kim
Hee-yeon, an analyst at Nomura Securities.

Shares in Korea Exchange Bank (004940.KS) rose 2.84 percent
to 14,500 won on expectations that the bank may become available
for sale yet again on lingering caution over the fate of UK-based
bank HSBC's acquisitiion.

A South Korean high court on Tuesday cleared U.S. private
equity house Lone Star of manipulating the stock price of a
former credit card firm, removing an obstacle to HSBC's $6.3
billion deal to buy control of KEB.

But market watchers remained doubtful as the Financial
Services Commission said it was not appropriate to go ahead with
the sale process with ongoing legal proceedings [ID:nSEO253634]

Major exporters such as Hyundai Motor (005380.KS) also came
under pressure, hit by news consumer confidence in South Korea's
second-largest export market hit a 16-year low in June, while
house prices suffered record annual drops in April.

Hyundai Motor fell 2.1 percent to 74,700 won and its smaller
affiliate Kia Motors (000270.KS) lost 2.09 percent to 11,700 won.

Meanwhile stocks sensitive to oil prices such as Korean Air
Line (003490.KS) and Asiana Airlines (020560.KS) also traded
lower after U.S. crude CLc1 settled at $137 a barrel after
climbing as high as $138.75 on Tuesday.

Korean Air fell 2.22 percent to 52,900 won and Asiana
Airlines lost 0.53 percent to 5,680 won.