Seoul shares up as U.S. move eases credit worries

(Updates to mid-morning)

By Park Jung-youn

SEOUL, July 14 (Reuters) - Seoul shares traded slightly
higher on Monday after opening lower, helped by U.S. government
pledges to provide capital for troubled mortgage lenders, but
record oil prices weighed on airlines and carmakers.

Shares of firms with interests in North Korea including
Hyundai Group shipping unit Hyundai Merchant Marine Co
(011200.KS) fell after a South Korean visitor to a North Korean
resort was shot dead and tourism to the resort was halted.

Hyundai Merchant Marine fell 4.36 percent to 37,300 won.

The Korea Composite Stock Price Index was up 0.34
percent to 1572.86 points as of 0107 GMT.

"Continued foreign selling is weighing on the index as market
conditions remain fragile, and U.S. shares' falls on credit
worries are still impacting the market today," said Bae
Sung-young, a market analyst at Hyundai Securities.

"It is good that the U.S. government plans to back up
troubled mortgage lenders but investors want to see the details
of the measures before making any moves," Bae said.

South Korean airlines tumbled after oil hit a record over
$147 on Friday, worsening worries about their profit margins
while passenger demand has been dampened by pricier tickets.

Korean Air (003490.KS) fell 1.74 percent to 42,450 won and
Asiana Airlines (020560.KS) lost 2.11 percent to 4,650 won.

However shares in South Korean steelmakers rose across the
board after POSCO (005490.KS) posted a forecast-beating
34-percent rise in quarterly profit and increased its earnings
targets to reflect a sharp rise in its benchmark steel prices.

POSCO rose 3.13 percent to 527,000 won and Hyundai Steel
(004020.KS) gained 1.12 percent to 72,300 won.

Blue chips such as Samsung Electronics (005930.KS) and LG
Electronics (066570.KS) rebounded after their latest large
losses.

Samsung Elec was up 0.53 percent to 571,000 won and LG Elec
was up 3.11 percent to 116,000 won.

Shares in DC Chemical (010060.KS) rose 3.79 percent to
342,500 won after the company said it won a polysillicon order
worth 891.9 billion won ($894 million) on Monday.

($1=997.7 Won)