* KOSPI seen extending gains to as high as 2,385 points
* Index to benefit from economic pickup, higher liquidity
* Auto, tech, financial plays seen bullish
By Jungyoun Park
SEOUL, Dec 8 (Reuters) - South Korea's key share index is seen gaining over 20 percent in the coming year on an improving global economic backdrop and increased liquidity inflow as the domestic won currency strengthens, a Reuters poll found.
The benchmark Korea Composite Stock Price Index was seen rising to 2,385 points by the end of 2011, up 22 percent from its Wednesday close of 1,955.72, according to the median forecast of 12 strategists whose target estimates ranged from 1,800 to 2,600 points.
"Steady improvements seen in developed market economies such as the United States, and strengthening of the domestic won currency will continue to fuel liquidity inflow into the South Korean equities market," said Lee Kyung-soo, a market analyst at Shinyoung Securities.
The won has gained nearly 3 percent on the dollar so far this year.
A combination of strong corporate earnings by key listed companies and foreign capital inflow helped the KOSPI rise to a three-year high last month.
The main index has rebounded over 27 percent since hitting a low of 1,532.68 points in late May of this year. The index has gained 16 percent so far in 2010.
Foreign investors were net buyers of 18.7 trillion won ($16.5 billion) worth of stocks so far this year, continuing their buying after a total net buying of 32.4 trillion won during 2009.
Many strategists, polled over the past week, picked auto, financial and technology plays as the likely outperformers.
Hyundai Motor and Kia Motors were among the most preferred plays as their global market share gain is likely to continue with improved quality and better pricing, according to UBS, a Swiss brokerage.
Shares in Hyundai Motor and Kia Motors have jumped about 50 and 158 percent respectively so far on the year.
Meanwhile banks such as KB Financial Group offered more attractive valuations following their battered performance this year.
Their earnings recovery outlook relative to the market, and historically strong share price performance in the environment of stronger won offered "extreme value", said Credit Suisse in its recent note.
Shares in KB Financial Group have fallen around 6 percent so far this year, while Shinhan Financial Group have edged up 5 percent.
Technology issues such as Samsung Electronics were also set to benefit from improving economic conditions in South Korea's key export partners such as the United States and China.
"There are signs U.S. consumers are emerging again as ready shoppers," said Cho Seong-joon, an analyst at NH Investment & Securities.
A set of U.S. data showed late last week a gauge of jobless benefits hit a new two-year low and pending home sales unexpectedly rose in October, adding to fresh signs the U.S. economy has broken out of its summer soft patch and may also lift sentiment further.
"More importantly, China's purchasing power is growing stronger as does its economic prowess. The axis of global spending is now moving to China," said Park Suk-hyun, a market analyst at KTB Securities.
China is South Korea's biggest export market.
But traders said percolating geopolitical tension in South Korea, following artillery shelling by North Korea, posed some risks, albeit limited.
South Korean stock futures and the won had tumbled heavily on Nov. 23, when North Korea fired dozens of artillery shells at a South Korean island.
"However unless all hell breaks loose, and by this I mean war, negative market reaction to North Korea tension will be brief and fairly contained," said a fund manager who declined to be named.
($1=1136.5 Won) (Reporting by Jungyoun Park, additional polling by Bangalore Polling Unit; Editing by Jon Loades-Carter)