Seoul shares rise; Daewoo falls, retailers, banks up

* KOSPI rises 1 pct, positive domestic data helps

* Daewoo Engineering falls as investors reap quick profits

* Retailers gain on earnings hopes
(Updates to mid-morning)

By Jungyoun Park

SEOUL, June 30 (Reuters) - Seoul shares rose on Tuesday after
gains overnight on Wall Street, with sentiment boosted by a
positive set of domestic data, but shares in Daewoo Engineering
(047040.KS) fell as investors moved to lock in profits on recent
sharp gains.

The Korea Composite Stock Price Index .KS11 (KOSPI) was up
1.09 percent at 1,403.60 points as of 0126 GMT.

"Overall market sentiment has improved, thanks to rises
overnight in U.S. stocks and positive domestic data. We are
seeing both programme and foreign investor buying," said Lee
Kyoung-su, a market analyst at Taurus Investment & Securities.

Foreign investors were buyers of a net 18 billion won ($14.08
million) as of 0135 GMT, picking up Seoul stocks for a fourth
consecutive session.

South Korean manufacturers' assessment of the business
outlook for July rose for a fourth straight month to a 13-month
high, data showed on Tuesday, indicating the economy was
approaching a turnaround. [ID:nSEO303763]

Daewoo Engineering & Construction (047040.KS) tumbled 4.36
percent after its shares jumped in the previous session on news
its cash-strapped controlling shareholder, Kumho Asiana Group,
was looking to sell its stake in the South Korean builder.

"There is not much change in the view. Investors are moving
to take profit on gains," said Heu Moon-wook, an analyst at
Samsung Securities.

Daewoo Engineering shares had gained 23 percent in a week.

The South Korean builder's shares could react sensitively to
various scenarios of the sale in the near term, analysts said,
which include the sale of a 50 percent stake plus one share, and
the sale of a 72 percent stake owned by the group and financial
investors. [ID:nSP482036]

Retailers climbed on hopes the June bargain sale period will
help retailers post solid sales on the month, analysts said.

"Normally, June is a slower month, but sales tallies from
ongoing June premium sales is coming out strong. We think
department store operators will probably post solid sales growth
this month," said Ahn Ji-young, an analyst at IBK Securities.

Lotte Shopping Co Ltd (023530.KS) climbed 4.15 percent and
Shinsegae Co Ltd (004170.KS) gained 3.4 percent.

Banks also rallied, with KB Financial Group (105560.KS)
rising 3.08 percent and Hana Financial Group (086790.KS) surging
3.72 percent.

"Banking issues are riding on window dressing effects as
institutions are moving in to snap up key sectoral shares,
including financials, as the end of first half is imminent," said
Yoon Chang-bae, an analyst at Hyundai Securities.

"Some investor are also betting on improvements in their
performances by third quarter," Yoon added.

Memory chipmakers gained amid brewing second-quarter earnings
hopes.

Hyundai Securities estimated in its report on Tuesday that
Samsung Electronics (005930.KS) would see 1 trillion won in
operating profit for the second quarter, and forecast 196 billion
won in operating losses for Hynix Semiconductor (000660.KS), much
less than earlier forecasts.

Hyundai Securities cited stronger-than-expected gains in
memory chip prices for the firm set of estimate figures.

Samsung Electronics was up 1 percent and Hynix Semiconductor
advanced 1.83 percent.
($1=1278.0 Won)
(Editing by Chris Lewis)