Seoul shares inch up; shipbuilders suffer

(Updates to mid-morning)

SEOUL, May 13 (Reuters) - Seoul shares inched up on Tuesday,
with gains by technology shares on the U.S. semiconductor index's
advance overnight marginally outweighing losses by shipbuilders
and refiners on rising commodities prices.

Technology titles such as Samsung Electronics (005930.KS: Quote, Profile, Research) and
and LG Electronics (066570.KS: Quote, Profile, Research) advanced, tracking their Wall
Street peers' rise on an improving outlook for the technology
sector.

Samsung climbed 2.4 percent to 726,000 won and LG Electronics
rose 1 percent to 151,500 won.

However shares in shipbuilders slipped across the board on
worries rising raw material prices and a global economic downturn
will dent their profits.

Daewoo Shipbuilding & Marine Engineering (042660.KS: Quote, Profile, Research) led the
fall, dropping 7.27 percent to 40,800 won after Merrill Lynch
downgraded its rating on the world No.3 shipbuilder from buy to
sell, dealers said.

"Worries about the latest hikes in steel plate prices and an
economic downturn were worsened by the Merrill downgrade," said
Cho In-kap, an analyst at Goodmorning Shinhan Securities.

Analysts also said the sector's latest gains on expectations
of M&A premiums were excessive.

Hyundai Heavy Industries (009540.KS: Quote, Profile, Research) fell 3.38 percent to
357,000 won.

MARKET SLUGGISH

The Korea Composite Stock Price Index rose 0.06 percent to
1,822.73 points as of 0141 GMT, shaking off three consecutive
losing sessions that brought the main index down by 2 percent.

"Shares opened higher after three sessions of losses. But it
appears that worries about inflation and health of the global
economy are weighing on the market as it slips in and out of
positive territory," said Kim Joong-hyun, a market analyst at
Goodmorning Shinhan Securities.

"Rallies led by the latest set of solid corporate earnings
have lost much of their steam. We need fresh catalysts or shares
will continue to move sluggishly," Kim added.

Oil refiners such as SK Energy (096770.KS: Quote, Profile, Research) declined on
worries continued high oil prices will eat into refining margins.

SK Energy fell 3.11 percent to 109,000 won and S-Oil
(010950.KS: Quote, Profile, Research) slid 0.73 percent to 68,200 won.

However some financials such as Kookmin Bank (060000.KS: Quote, Profile, Research) rose
after long-suffering bond insurer MBIA Inc (MBI.N: Quote, Profile, Research) reported
results that outperformed market expectations and an upbeat
business outlook.

Kookmin Bank inched up 0.31 percent to 65,400 won and Hana
Financial Group (086790.KS: Quote, Profile, Research) rose 1.64 percent to 43,400 won.

(Reporting by Park Jung-youn; Editing by Jonathan Hopfner)