Seoul shares end up helped by banks, steel issues

* KOSPI firm after heavy losses, but trims early gains

* OCI tumbles after report of investigation of chairman

* Samsung Digital Imaging sinks on earnings worries

(Updates to close)

By Jungyoun Park

SEOUL, July 14 (Reuters) - Seoul shares ended higher after
volatile trade on Tuesday, with gains led by banks and steel
issues, but markets trimmed earlier 1.7 percent gains pressured
by shipbuilders and OCI (010060.KS).

The Korea Composite Stock Price Index (KOSPI)
finished up 0.54 percent at 1,385.56 points.

"Although shares managed to eke out some gains...appetite in
markets was not very strong," said Lee Sun-yeop, a market analyst
at Goodmorning Shinhan Securities, noting sentiment remained weak
amid renewed geopolitical concerns and ahead of the earnings
season.

Gains were led by banking issues, which tracked a rally by
their U.S. peers and were further helped by positive brokerage
notes.

KB Financial Group (105560.KS) rose 2.58 percent to 45,800
won after JPMorgan upgraded it to "overweight" from "neutral,"
raising its target price to 54,000 won and lifting its net profit
estimate for the parent company of top South Korean bank Kookmin.

Shinhan Financial Group (055550.KS) rose 3.34 percent to
34,000 won after JPMorgan also upgraded it to "overweight" and
raised its target price to 44,000 won.

But polysilicon maker OCI Co Ltd (010060.KS) tumbled 8.7
percent after a report by the Maeil Business Newspaper that the
company's chairman was being investigated by financial regulators
and prosecutors on suspicion of insider trading. [ID:nSEO327912]

OCI denied the report, while South Korea's regulatory
Financial Supervisory Service declined to give details.

Samsung Digital Imaging (108070.KS) tumbled after the company
gave a weak second-quarter earnings guidance late on Monday.

The camera-making affiliate of Samsung Electronics
(005930.KS) said it expected an operating profit margin of around
1 percent in a filing to the Korea Exchange.

HMC Investment & Securities said in a report on Tuesday it
had lowered its six-month target share price for Samsung Digital
Imaging by 58 percent to 40,000 won from 95,000 won, and
downgraded its shares to "neutral" from "buy".

Samsung Digital Imaging shares plunged 15 percent to 35,500
won.

Shipbuilders also sank amid growing sectoral worries, with
STX Offshore & Shipbuilding (067250.KS) retreating 3.79 percent.

But Hyundai Hysco (010520.KS) shares jumped 13.19 percent on
hopes that the steel sheet and pipe products maker would post
improved earnings for the second quarter.

"The company has posted thin profit margins for years,
largely due to a shortage of hot-rolled steel, but the supply
problem has eased this year," said Dongbu Securities analyst Lee
Jong-hyung in a note for clients dated July 13.

Hot-rolled steel is a key material for Hyundai Hysco's steel
sheet products.

Lee said in the report that the company's performance was
expected to improve over the mid- to longer term when lower
prices for hot-rolled steel are reflected in its earnings.

Domestic suppliers of hot-rolled steel have been cutting
prices this year, including Hyundai Steel (004020.KS) in June.
[ID:nSEO17808]