Seoul shares seen lower on econ, credit worries

 SEOUL, Oct 7 (Reuters) - South Korean shares looked set for
more losses on Tuesday on deepening worries about the global
economy and the deepening credit crisis, but lower oil prices
may lift some stocks such as airlines which are sensitive to
energy prices.

 Exporters including Samsung Electronics (005930.KS: Quote, Profile, Research, Stock Buzz) and
Hyundai Motor (005380.KS: Quote, Profile, Research, Stock Buzz) may fall as the economic outlook
grows increasingly grim. Many investors expect the
manufacturers to lower their earnings outlooks in the upcoming
earnings season.

 "Third-quarter earnings are set to come out weak, and
companies will likely issue darkened outlooks for next year as
the economic recession looms," said Yoo Soo-min, a market
analyst at Hyundai Securities.

 "There is little that the market can hope for at this
point, except perhaps the coordinated efforts by global central
banks to cut interests rate for better credit environment. But
many doubt whether even that would be enough to thaw the credit
markets," said Yoo Soo-min a market analyst at Hyundai
Securities, adding that current volatility in South Korea's
foreign exchange market is mainly due to global capital crunch.

 On Monday, the won fell by as much as 5 percent to its
weakest level since 2002 against the dollar and stocks slumped
after the government said its banks were having trouble raising
foreign currency funds.

 However, Rhee Chang-yong, vice chairman of the Financial
Services Commission, on Tuesday dismissed worries that the
country could fall into another foreign exchange crisis, saying
local banks had no problem in rolling over their maturing
short-term foreign debt.

 Steep falls in oil prices to around $87 per barrel may help
boost airlines and retail issues such as Korean Air Line
(003490.KS: Quote, Profile, Research, Stock Buzz) and Lotte Shopping (023530.KS: Quote, Profile, Research, Stock Buzz).

 The Korea Composite Stock Price Index .KS11 closed down
4.29 percent at 1,358.75 points on Monday.
 ----------------------MARKET SNAPSHOT @ 2244 GMT ------------

                  INSTRUMENT   LAST       PCT CHG   NET CHG
 S&P 500             .SPX       1056.89     -3.85%   -42.340
 USD/JPY             <JPY=>       101.56       0.22%     0.220
 10-YR US TSY YLD    <US10YT=RR>  3.4606          --    -0.137
 SPOT GOLD           <XAU=>       857.4       -0.01%    -0.050
 US CRUDE            CLc1       88.53        0.82%     0.720
 DOW JONES           .DJI       9955.50     -3.58%   -369.88
 ASIA ADRS           .BKAS      106.66      -6.29%     -7.16
 -------------------------------------------------------------

 MARKET SUMMARY *Dow dives below 10,000 on credit,recession
fear[ID:nN06415603] *Oil drops 6 pct to below $88 on demand
concerns [ID:nSP369815] *Dollar, yen soar as anxiety over
crisis mounts [ID:nN06463015] *US Treasury curve widens to
steepest in 4 yrs  [ID:nNYD000309]

 STOCKS TO WATCH

 MEMORY CHIPMAKERS

 Japan's Toshiba (6502.T: Quote, Profile, Research, Stock Buzz) expects prices for NAND flash
memory chips to fall between 40 percent and 50 percent in the
next four quarters to September, the company's CEO
said.[ID:nL6432416]

  - - - -

 SAMSUNG ELECTRONICS

 SanDisk Corp (SNDK.O: Quote, Profile, Research, Stock Buzz) could be worth $34 to $36 a share if
Samsung Electronics were to sweeten its offer to reflect the
value of royalties it pays to the U.S. flash memory maker,
according to people familiar with the matter.[ID:nSP343792]

 (Reporting by Park Jung-youn; Editing by Kim Coghill)