Seoul shares rangebound; rate decision eyed

*Investors remain cautious ahead of rate decision

*Techs gain on lower oil

*Banks fall on rate hike worries

(Updates to midmorning)

By Park Jung-youn

SEOUL, Aug 7 (Reuters) - Seoul shares traded flat on Thursday
after a near 3-percent gain in the previous session and ahead of
the Bank of Korea's interest rate decision, but falling oil
prices helped lift some exporters such as Hynix Semiconductor
(000660.KS).

The Korea Composite Stock Price Index was up 0.11
percent at 1,580.50 points as of 0035 GMT.

"With a lack of factors to bring about upward momentum, the
market is currently rangebound as investors wait for the central
bank's interest rate decision," said Lim Tae-geun, a market
analyst at Daewoo Securities.

"If a rate hike is made, more losses in stocks are
inevitable," Lim added.

South Korea's central bank is expected to raise interest
rates for the first time in a year to their highest in 7-½
years on Thursday, but a Reuters poll suggests the policy
meeting's outcome may be a close call [ID:nSEO293527].

Shares in technology issues rallied after U.S. crude CLc1
fell to around $118 a barrel on Wednesday, pointing to
improvements in consumer sentiment and appetite for South Korean
goods.

Hynix Semiconductor rose 2.23 percent to 22,900 won and LG
Electronics (066570.KS) went up 1.38 percent to 110,500 won.

But banking shares fell across the board after their latest
sharp gains and ahead of the Bank of Korea's policy meeting.

Kookmin Bank 060000.KS dropped 2.32 percent to 59,000 won
and Hana Financial Group (086790.KS) dipped 1.11 percent to
40,000 won. Woori Finance Holdings (053000.KS) fell 2.75 percent
to 15,900 won, after news on Wednesday that unit Woori Bank plans
to sell covered bonds worth 1 billion euros ($1.55 billion) or
more in Europe this year. [ID:nSEO317701]

"We are seeing technical corrections after banks' latest
gains, but anxieties about the central bank's rate decision are
also weighing on banking shares," said Lim Il-sung, an analyst at
Meritz Securities.

"Further losses or a rebound will be seen after the decision
comes out," he added.

Meanwhile STX Shipbuilding (067250.KS) fell 5.35 percent to
24,750 won after reporting a weaker-than-expected set of second
quarter earnings on Wednesday.