Seoul shares gain; Samsung up ahead of earnings estimates

* KOSPI inches up 0.3 percent

* Samsung Elec rises to nearly 5-month high on earnings outlook, U.S. data

* Automakers mixed

SEOUL, Oct 2 (Reuters) - South Korean stocks edged up in early trading on Tuesday, led by heavyweight Samsung Electronics

ahead of the release of its quarterly earnings estimates later this week.

Investor sentiment was buoyed by surprisingly strong U.S. manufacturing data, but persisting concerns about the global economy capped share price gains.

"Samsung's third-quarter profit is expected to be slightly better than forecast. The South Korean company will also benefit from a potential improvement in U.S. consumption," Kim Young-joon, an analyst at SK Securities, said.

The Korea Composite Stock Price Index (KOSPI) rose 0.3 percent to 2,002.42 points as of 0226 GMT.

Foreign investors snapped up shares for a second day in a row, while institutional investors continued to dump stocks.

"The momentum is weak on the 'sandwich' day when trading volume is thin," Kim said. South Korean stock markets were closed on Monday for a holiday, and will be closed again on Wednesday.

U.S. manufacturing grew slightly last month for the first time since May, but euro zone factories suffered their worst quarter since early 2009 and factory activity in China also contracted.

Samsung Electronics, South Korea's most valuable stock, rose 1.9 percent to their highest intraday levels in nearly five months.

Goldman Sachs expects Samsung to post a fourth consecutive quarter of record profits, estimating operating profit at 7.8 trillion Korean won ($7.02 billion) for the July to September period, up 83 percent on a year earlier due to by robust sales of Galaxy S III smartphone.

A U.S. court also removed a sales ban against Samsung Electronics's Galaxy Tab 10.1 that was won by Apple Inc

in a patent dispute, allowing the South Korean electronics maker to sell the product in the United States.

South Korean carmakers were mixed, with Hyundai Motor

down 1.8 percent and Kia Motors

up more than 3 percent.

Kia Motors recently underperformed sibling Hyundai Motor, weighed down by concerns that recent labour strikes at South Korean plants would hurt its earnings and sales in the third quarter.

But Choi Dae-sik, an analyst at BS Investment & Securities, said the concerns were overdone,

Shares in POSCO

inched up 0.14 percent after a consortium including the South Korean steelmaker and Noble Group urged Arrium

directors to continue discussions after the Australian miner and steel maker rejected a A$1.01 billion ($1.04 billion) takeover offer.

Shares in Daewoo Shipbuilding & Marine Engineering

were down 0.96 percent after the South Korean shipbuilder said on Friday that a 1.2 trillion Korean won ($1.08 billion) order to build two ships was cancelled due to the global economic downturn.

($1 = 1111.4250 Korean won)

(Reporting by Hyunjoo Jin; Editing by Richard Pullin)