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Seoul share gains capped after Samsung earnings boost

* LG Display falls after brokerage downgrade

* Foreign selling weighs on market

SEOUL, Oct 5 (Reuters) - Seoul shares edged up on Friday after bellwether Samsung Electronics

posted

stronger-than-expected earnings, but a dimmer outlook capped price gains.

Shares in Samsung Electronics, which makes up over 15 percent of the benchmark KOSPI

, ended up 0.22 percent after rising as much as 1.68 percent earlier in the day after it estimated a record quarterly profit of $7.3 billion, powered by strong sales of its Galaxy smartphones.

"There are concerns that Samsung earnings may have peaked and its competition with Apple's

iPhone 5 will be challenging," Lee Seon-yeob, an analyst at Shinhan Securities, said.

"Samsung Elec's share price had been steadily gaining before today's earnings results and now share movement will be affected by fourth-quarter forecasts," said David Choi, an analyst at SK Securities.

The Korea Composite Stock Price Index (KOSPI) ended up 0.12 percent at 1,995.17 points.

Continued foreign selling weighed on the market although institutional investors lent support.

LG Display

tumbled 4.45 percent after a local brokerage downgraded its outlook for the South Korean flat-screen maker, expecting falls in prices of TV and notebook panels in the fourth quarter because of sluggish demand and low seasonality.

"The poor performance of LG Display and other laggards is weighing down on the bounce to the KOSPI following Samsung's announcement," said Kim Chul-jung, an analyst at Korea Investment & Securities.

Hyundai Motor

shares remained weak, down 0.82 percent, as investors remained concerns about its third-quarter earnings despite its sales recovery in September.

Move on day +0.12 percent 12-month high 2,057.28 14 March 2012 12-month low 1,666.52 5 Oct 2011 Change on yr +9.28 percent All-time high 2,231.47 27 April 2011 All-time low 93.10 6 January 1981

(Reporting by Somang Yang and Hyunjoo Jin; Additional reporting by Seongwon Chang; Editing by Chris Gallagher and Matt Driskill)

((somang.yang@thomsonreuters.com)(+82 2 3704 5643)(Reuters Messaging: somang.yang.thomsonreuters.com@reuters.net))

Keywords: MARKETS KOREA STOCKS/