Seoul shares rebound on global economy optimism, Fed eyed

(Updates to midmorning)

* KOSPI rebounds on back of robust global data

* Foreigners set to turn net buyers after 5 days of selling

* Mobile carriers rally to underpin broad market gains

By Jungmin Jang

SEOUL, Dec 17 (Reuters) - Seoul shares rebounded from a three-month closing low on Tuesday morning, tracking global markets after upbeat data from the United States and Europe spurred optimism about the global economy, while investors awaited a key Federal Reserve meeting this week.

The Korea Composite Stock Price Index (KOSPI) was up 0.7 percent at 1,975.14 points by 0136 GMT, on track to halt a five-day losing streak.

"Signs of a brighter global economic outlook are providing a reason for short-covering, but fluctuation in the market is still expected with the Fed's tapering decision to be unveiled in a couple of days," said Kim Byung-yeon, a market analyst at Woori Investment & Securities.

Investors are awaiting the outcome of Fed's Dec. 17-18 policy meeting to see when it will start reducing its $85 billion monthly bond-purchasing stimulus.

U.S. manufacturing output rose for a fourth straight month in November while a gauge of euro zone business activity rose in December to its second-highest reading since mid-2011, boosting Wall Street and European stocks overnight.

Foreign investors purchased a net 14.6 billion won ($13.9 million) worth of KOSPI shares near midsession, poised to snap five straight sessions of net selling.

Advancers outnumbered decliners 447 to 303, with shipbuilders leading gains for a second straight day.

The shipbuilding subindex rose more than 3 percent buoyed by Hyundai Heavy Industries Co Ltd and Samsung Heavy Industries Co Ltd, which advanced 3.5 percent and 4.2 percent, respectively.

Telecommunications shares also outperformed with KT Corp , the country's second-largest mobile carrier, up 1.2 percent after nominating former Samsung Electronics Co Ltd president Hwang Chang-gyu as its new CEO. KT shares have lost 9.5 percent so far this month after the company cut its year-end dividend plan citing decreased earnings.

Top mobile carrier SK Telecom Co Ltd gained 2 percent and third-ranked LG Uplus Corp added 1 percent.

Naver Corp, the country's largest search portal operator, rose 4 percent to become the sixth-largest KOSPI component on strong foreign buying.

Daewoo Engineering & Construction Co Ltd plunged 8.1 percent after the Financial Supervisory Commission said it would inspect the company's accounting practices over alleged violations. A Daewoo Engineering official said the company has not been contacted by the FSC and was awaiting further developments.

Korea Gas Corp dropped 5.7 percent after the company cut its full-year outlook due to asset impairment losses from the development of gas fields in Canada.

The strength in large-caps helped lift the KOSPI 200 index of core stocks up 0.9 percent. The tech-heavy junior KOSDAQ edged up 0.2 percent. ($1 = 1051.6000 Korean won) (Editing by Chris Gallagher)