* Shares rangebound with eyes on Europe, bond auction

* Refiners rally as oil prices climb on Iran tensions

* Tech shares, banks lead falls

By Joonhee Yu

SEOUL, Jan 5 (Reuters) – Seoul shares closed
relatively steady on Thursday after a rangebound trading
session, as renewed focus on the unresolved euro zone debt
crisis prompted investors to tread cautiously.

“Offshore investors, who had been the main buyers as of
late, failed to move the market today, taking a step back and
making very few bids,” said Cho Byung Hyun, a market analyst at
Tong Yang Securities.

The Korea Composite Stock Price Index (KOSPI) closed
0.13 percent lower at 1,863.74.

Refiners were the best performers on the day, with SK
Innovation, the parent firm of South Korea’s largest
crude oil refiner gaining 2.66 percent and S-Oil,
the country’s third largest, rising 4.29 percent.

On Wednesday, European governments agreed to ban all Iranian
crude oil imports in the latest round of Western sanctions to
deter Tehran from further pursuing its nuclear programme,
threatening to drive oil prices higher.

Large-cap technology shares weighed on the market, with
Samsung Electronics Co dipping 2.31 percent while LG
Electronics Co shed 1.07 percent.

Bank shares, seen as most sensitive to events in Europe due
to their exposure to euro zone debt, also slumped. Hana
Financial Group fell 3.2 percent and Shinhan
Financial Group shed 0.86 percent.

“Bank shares are being hurt by the jitters surrounding the
euro zone. Tech shares on the other hand have a bright outlook,
but went through technical adjustments today after outperforming
other sectors for an extended period,” said Cho.

The French bond market faces a key test on Thursday as it
holds an 8 billion euro auction of long-term debt, a day after
Germany saw demand recover on its first auction of the year on
Wednesday.

Shares in Taihan Electric Wire Co Ltd plummeted
6.81 percent after the company confirmed reports that it was
planning a new rights issue to boost its liquidity.

Institutions snapped up a net 268.1 billion won ($233.4
million) worth of shares, posting a fifth consecutive session of
buying, while offshore investors dumped a net 43.6 billion won
worth.

The KOSPI 200 index fell 0.28 percent while the
junior KOSDAQ index rose 1.1 percent.

Move on day -0.13 percent

12-month high 2,231.47 27 April 2011

12-month low 1,644.11 26 September 2011

Change on yr +2.08 percent

All-time high 2,231.47 27 April 2011

All-time low 93.10 6 January 1981
($1 = 1148.800 Korean Won)

(Editing by Jonathan Hopfner)