Seoul shares slip weighed by telcos, banks

* Institutional, retail investors sell

* Ex-dividend effect weighs on index

* Nuclear power issues, exporters rise

(Updates to mid-morning)

By Jungyoun Park

SEOUL, Dec 29 (Reuters) - Seoul shares retreated following a four-session gaining streak and as the ex-dividend effect took hold of the main index on Tuesday, with losses in telecoms issues including SK Telecom (017670.KS) weighing on markets.

"Considering the ex-dividend effect today, the main index is actually doing pretty well. Issues related to the United Arab Emirates nuclear power deal continue to trade strong, while exporters are also up on expectations for next year," said Lee Sun-yub, a market analyst at Shinhan Investment Corporation.

After companies go ex-dividend, investors no longer qualify for the nearest dividend payout.

The ex-dividend impact shaved an estimated 17.58 points off the main KOSPI index at the open, according to a statement from the Korea Exchange.

Listed companies that close their financial years in December went ex-dividend on Tuesday, the exchange said.

The Korea Composite Stock Price Index .KS11 (KOSPI) was down 0.25 percent at 1,681.43 points as of 0119 GMT.

Losses were led by telecommmunications issues, which tend to pay out heavy dividends.

"Fundamentally the telco sector has been seeing positive newsflows, such as KT's early retirement plans," said Stan Jung, an analyst at Woori Investment & Securities.

"But they're falling today as dividend-targeted investment schemes near an end."

KT, South Korea's dominant fixed-line operator and No.2 mobile carrier, said on Monday that about 16 percent of its workforce would leave under an early retirement programme. [ID:nSEL002843]

Shares related to a major UAE nuclear power deal advanced for a second day.

Korea Power Engineering Co Inc (052690.KS) and KR Plant Service & Engineering (051600.KS), both units of KEPCO that specialise in power plant businesses, were up 11.48 percent and 3.57 percent respectively.

Hyundai Engineering & Construction (000720.KS) rose 1.27 percent and Samsung C&T Corp (000830.KS) advanced 1.09 percent.

A consortium led by KEPCO and including Hyundai Engineering & Construction and Samsung C&T Corp won a landmark deal to build and operate four nuclear reactors in the UAE. [ID:nLDE5BQ05O]

Key blue chip exporters also rose, with LG Display (034220.KS), the world's No.2 maker of flat panels, advancing 1.04 percent and Hyundai Motor (005380.KS), South Korea's top automaker, climbing 0.24 percent.

Shares in Hyundai Heavy Industries (009540.KS) rose 1.45 percent after news the Abu Dhabi Gas Liquefaction Company Ltd (ADGAS) formally signed an agreement worth $1 billion with Hyundai Heavy for the construction of an integrated gas development plant. [ID:nLDE5BR0MU]

But banks retreated, with KB Financial Group (105560.KS) losing 0.33 percent and Shinhan Financial Group (055550.KS) declining 1.22 percent.

(Reporting by Jungyoun Park; Editing by Jonathan Hopfner)