Seoul shares edge up by midday led by tech issues

SEOUL: Seoul shares inched up by midday on Friday as investors swooped in to buy battered technology shares such as LG Electronics , betting the market will regain its footing after logging its first weekly drop in three weeks.

"The market is taking a pause and investors are setting their eyes firmly on the results of stress tests of Europe's banks later today as it's a near-term factor that might rattle the market again," said Park Hyung-joong, a market analyst at Meritz Securities.

"With the results and a bunch of overseas data ahead, buying interest is subdued. Investors are adjusting their risk profiles and taking their time."

Major US data due on Friday includes Federal Reserve industrial output and the Empire State Manufacturing Survey for July by the New York Federal Reserve.

In Europe, the Italian austerity budget worth nearly 48 billion euros is expected to be passed on Friday evening by the lower house of parliament after it was approved by the upper house a day earlier.

By 0150 GMT, the Korea Composite Stock Price Index (KOSPI) rose 0.27 percent to 2,135.72 after opening down 0.31 percent.

The index is set to close the week lower after three straight weekly gains.

Battered technology shares led the market higher after Google Inc surged 11 percent following stronger-than-expected quarterly earnings.

Shares of home appliance and handset maker LG Electronics Inc gained 2.4 percent and LG Display , which produces TV flat screens, climbed 2 percent.

Hynix Semiconductor Inc rose 1.9 percent, snapping a four-day losing streak on concerns of a slow recovery in chip demand that saw it shed 11 percent.

Clothing retailer Shinsegae International jumped more than 8 percent on the second day of trading after its 130 billion won ($123 million) initial public offering.

Shinsegae, which imports luxury brands such as Coach and Giorgio Armani, saw its share price nearly double in two days, valuing the company at about 893 billion won.

"It's a promising company and has a strong retail network as it's a core unit of the larger Shinsegae group," said Woori Investment & Securities analyst Yoon Hyo-jin. "An upbeat outlook for the luxury product market is also driving its shares but the gains we've seen in just two days are excessive and I wouldn't recommend buying the stock at the current level."

Steelmaker POSCO was among the major blue-chip losers. The stock fell 1.2 percent, reversing Thursday's 1 percent gain.

Copyright Reuters, 2011