Seoul shares rebound led by financials, airlines

(Updates to mid-morning)

By Park Jung-youn

SEOUL, July 9 (Reuters) - Seoul shares bounced 1.3 percent
higher on Wednesday led by financials and airlines after a near 3
percent loss in the previous session, with easier oil and a
rebound in Wall Street shares overnight lending support.

The Korea Composite Stock Price Index was up 20.21
points to 1,553.68 points as of 0139 GMT. Its Tuesday finish
marked a 14-month closing low and a 19 percent drop since the
beginning of the year.

"Eyes are on corporate earnings and companies' outlook
comments, and investors will react ruthlessly to disappointing
numbers or comments at times like this," said Won Jong-hyuk, an
analyst at SK Securities.

Won's comments point to tense times ahead as South Korea's
quarterly earnings reporting season gets underway later on
Wednesday with second quarter numbers from flat screen maker LG
Display 0342220.KS.

"Foreign investors will probably react more sensitively to
U.S. bank earnings. Some signs of changes for the better are much
awaited," Won said.

Meanwhile South Korea's government sought to sooth concerns
raised by the market's recent slide, saying the country's stock
markets had solid potential buyers as large-size pension funds,
including the National Pension Service, are planning to up stock
purchases. [ID:nSEO89457]

"South Korean pension funds like NPS are long-term value
investors of Korea Inc, and they will take chances to buy up more
shares whenever the market seems to have hit the bottom," said
Kim Byung-yeon, a market strategist at Woori Investment and
Securities.

"While pension funds' investments will not bring the index
up, they probably will keep the index steady near the floor," Kim
said.

However shares in LG Display tumbled ahead of its earnings
announcement, expected around the time the market closes at 3 pm
(0600 GMT), on worries that margins on its panels are set to
weaken in the second half of this year, according to analysts.

"LG Display's earnings are set to weaken rapidly from July
after hitting a peak in May," Kiwoom Securities said in a report
on Wednesday. LG Display fell 4.37 percent to 35,050 won,
standing out in a firm tech sector which saw Samsung Electronics
(005930.KS) up 1.2 percent to 600,000 won.

Financials, which led Tuesday's falls, advanced, helped by
gains in their U.S. peers after comments from Federal Reserve
Chairman Ben Bernanke pointed to additional emergency lending for
big Wall Street banks.[ID:nN08312815]

Kookmin Bank 060000.KS, South Korea's top commercial
lender, rose 5.09 percent to 57,800 won after its 8.64 percent
slump in the previous session, while Samsung Securities
(016360.KS), South Korea's leading brokerage, gained 4.49 percent
to 60,500 won.

Airlines such as Korean Air Line (003490.KS) and Asiana
Airlines (020560.KS) bounced after oil lost more than $5 on
Tuesday, settling at around $136 a barrel, easing some pressure
on their cost burdens.

Korean Air Line rose 6.6 percent to 41,200 won and Asiana
Airlines went up 4.48 percent to 4,550 won.