Seoul shares dragged down by techs, financials

(Updates to mid-morning)

By Park Jung-youn

SEOUL, July 8 (Reuters) - Seoul shares traded lower on
Tuesday, dragged down by financials such as Kookmin Bank on
renewed credit worries in Wall Street and tech issues such as LG
Display facing increasingly grim earnings prospects.

Shares in LG Display (034220.KS) fell after Lehman Brothers
cut its target price on the company by 17 percent, citing
"downwardly adjusted earnings estimates."

"The LCD industry is currently in a state of oversupply,
owing mainly to weaker-than-expected demand attributable to the
global economic slowdown," Lehman Brothers said in its note on
Tuesday.

The world's second-ranked LCD maker is set to release its
second quarter earnings on Wednesday.

LG Display shares shed 1.2 percent to 37,050 won.

LG Electronics (066570.KS), its affiliate and the world's
No.4 handset maker, also slipped 2.5 percent to 117,000 won.

The Korea Composite Stock Price Index was down 1.46
percent to 1,556.86 points as of 0116 GMT, 1.2 percent away from
its mid-March yearly low of 1537.53 points. The index has fallen
18 percent from the year's high of 1,901 reached in mid-May.

"Despite easier oil, sentiment remains weak on the back of
renewed credit worries and falls in Wall Street shares
overnight," said Kim Seong-joo, a market analyst at Daewoo
Securities.

"Even institutions, which have been buyers for a couple
weeks, are selling, pushing the index down without active buyers
present," Kim added.

Banking issues such as Kookmin Bank 060000.KS and Shinnan
Financial Group (055550.KS) came under pressure after their U.S.
peers plummeted overnight.

Shares in Kookmin Bank were hit further by a local media
report that said JP Morgan had cut its target price and rating on
South Korea's top commercial lender.

"The concern seems to be that Kookmin's share price has
fallen below the price the bank had previously set for converting
current Kookmin shares into stocks in its future holding
company," said Lee Sun-yeob, a market analyst at Goodmorning
Shinhan Securities.

Kookmin aims to launch the holding firm at the end of
September to boost its investment banking and non-interest
income.

"Investors are concerned about the cost of the holding
company restructuring amid (Kookmin's) falling share price," Lee
added.

Shares in Kookmin plunged 6.64 percent to 56,200 won and
Shinhan Financial dropped 3.25 percent to 44,600 won.

However airlines such as Korean Air Line (003490.KS) and
Asiana Airlines (020560.KS) outperformed the market after U.S.
crude CLc1 dropped over $4 a barrel on Monday to settle
slightly above $141 a barrel.

Korean Air Line rose 1.86 percent to 41,050 won, rebounding
from the previous session's 4 percent fall, and Asiana Airlines
was flat at 4,660 won.