SEOUL: Seoul shares rose pared earlier losses to register a small gain by mid-morning on Tuesday after two consecutive selling sessions, but lack of progress in dealing debt in the US and Europe sapped investor confidence.
"The market is rebounding a bit after latest set of sharp falls. The likelihood of the US deficit reduction panel's failure has somewhat been reflected in the previous session, although it continues to weigh on sentiment," said Kwak Joong-bo, a market analyst at Samsung Securities.
US lawmakers abandoned their high-profile effort to rein in the country's ballooning debt on Monday in a sign that Washington likely will not be able to resolve a dispute over taxes and spending until 2013.
Kwak added market will likely move within a limited range of 1,800 points and 1,900 points through the end of the year, though strength in US Black Friday retail sales could help.
A local media report South Korea's Korea Teachers Pension was considering spending an additional 330 billion won ($290 million) in stock markets before the end of this year gave some support to share market.
The Korea Composite Stock Price Index (KOSPI) was up 0.46 percent at 1,828.43 points as of 0140 GMT.
Foreign investors were sellers of a net 31.5 billion Korean won ($27.62 million) worth of stocks, poised to offload shares for a fourth straight session. Institutions were buyers of a net 40 billion won, set to snap 5 selling streak.
Nuclear power related stocks rallied after the South Korean government re-confirmed its commitment to promote and invest in the nuclear power industry at a meeting led by Prime Minister's Office, an official at Prime Minister's Office told Reuters on Tuesday, confirming local media reports.
Shares in nuclear power plant designer KEPCO Engineering & Construction rose 3 percent and KEPCO Plant Service & Engineering, which maintains and operates nuclear power facilities, jumped 4 percent.
But LG International shares fell 1.6 percent after GS Retail set its initial public offering price at between 18,000 won and 21,000 won, below its preliminary range of 19,000 won and 22,000 proposed in June when it received an approval for the public offering..
All 15.4 million shares being offered are coming from its second-largest shareholder LG International.
Refiners underperformed after crude oil prices fell in US trade overnight. Lower crude oil prices tend to dent pricing of oil products.
Shares in SK Innovation were down 0.3 percent and GS Holdings, the holding company of GS Caltex, the country's No.2 crude oil refiner, traded flat.
Steelmakers were pressured by a local media report China Steel Corp has asked the Taiwanese government to impose anti-dumping duties on steel products from Korea and four other countries.
Shares in POSCO fell 1.2 percent and Hyundai Steel declined 1.8 percent.
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