Seoul shares recover; Kookmin up, LG Display drops

(Updates to mid-morning)

SEOUL, July 10 (Reuters) - Seoul shares recovered from
initial losses to rise slightly by mid-morning Thursday, as
investors picked up oversold stocks such as Kookmin Bank,
offsetting falling technology issues like LG Display (034220.KS).

The Korea Composite Stock Price Index was 0.31
percent higher at 1,524.10 points by 0131 GMT, after starting
more than 1 percent lower. Its Wednesday closing of 1,519.38 was
the lowest since April 19, 2007.

The Bank of Korea's decision in the morning to hold interest
rates steady at 5.0 percent for the 11th consecutive month was in
line with expectations and had little impact on stocks.
[ID:nSEL000170]

"Some investors are willing to take risks and buy as the
index nears 1,500," said Kim Hak-kyun, an analyst at Korea
Investment & Securities. "But the index may well head downward
again. The sentiment overall is very fragile."

Volatile U.S. markets kept investors nervous, as credit
jitters swept Wall Street overnight.

Kookmin Bank 060000.KS, South Korea's top commercial
lender, rose 3.57 percent to 58,100 won on rising expectations
the firm would buy back shares.

POSCO (005490.KS), the world's No. 4 steel maker, also
climbed 3.19 percent to 501,000 won, rebounding from recent
weakness ahead of its earnings announcement on Friday.

But LG Display Co Ltd, the world's No.2 maker of liquid
crystal displays (LCDs), slid 4.22 percent to 32,900 won as
concerns mount over the industry's second-half outlook. LG
Display reported after Wednesday's market close its
second-quarter net profit more than trebled to 759 billion won
($763 million), in line with forecasts.

LG Electronics Inc (066570.KS) also shed 3.49 percent to
110,500 won.

DC Chemical Co (010060.KS), a maker of polysilicon used in
solar power cells, jumped 8.23 percent to 302,500 won after a
polysilicon order from a Taiwanese firm. [ID:nSEL000169]

Foreign investors, who have been net sellers in the main
board for the past 23 consecutive sessions, were seen dumping
more shares on Thursday.

The recent gains in the won currency KRW=, boosted by
authorities' intervention, could prompt further foreign selling
as a higher won means more favourable conversion terms for those
leaving the market.
(Reporting by Rhee So-eui; editing by Jonathan Hopfner)