Seoul shares rise 1 pct helped by banks, Obama

* KOSPI snaps four-session losing streak

* U.S. President Obama's address lifts markets, banks up

* Hyundai Motor gains after Q4 results

(Updates to close)

By Jungyoun Park

SEOUL, Jan 28 (Reuters) - Seoul shares extended rises on Thursday to end up 1 percent after U.S. President Barack Obama's State of the Union address, with banking issues leading rises and Hyundai Motor (005380.KS) rallying after its quarterly results.

The Korea Composite Stock Price Index .KS11 (KOSPI) finished up 1.04 percent to 1,642.43 points, snapping a four-session losing streak.

"Sentiment was helped by U.S. President Obama's remarks, as they somewhat eased earlier fears about U.S. bank restrictions. But we've still got to see how Wall Street reacts," said Kim Seung-han, a market analyst at HI Investment Securities.

President Barack Obama on Wednesday told Congress that he was not interested in punishing U.S. banks, but would reject any financial reform bill that is too weak. [ID:nWAT014068]

Key banking issues bounced, with KB Financial Group (105560.KS), the parent firm of South Korea's top commercial lender Kookmin Bank, gaining 5.34 percent and Shinhan Financial Group (055550.KS) jumping 6.24 percent.

Shares in Hyundai Motor rallied 4.13 percent after South Korea's top automaker posted a record high quarterly operating profit, adding to hopes it would hold its edge over its rivals this year despite a firmer won KRW= and fewer state incentives for car buyers.[ID:nTOE60N00Q]

"The major opportunity for Hyundai Motor this year would be the issues faced by global rivals such as Japan's Toyota (7203.T), which is currently struggling with recalls," said Chang In-whan, a chief executive at KTB Asset Management.

"There is no doubt that Hyundai benefited from the weaker won KRW=, and if that trend changes, it may affect Hyundai negatively. However I think Hyundai is safe until the won hits 1,050 per dollar," Chang added.

Key technology issues rose, with Samsung Electronics (005930.KS), the world's No.1 memory chip maker, up 1.0 percent, and LG Electronics (066570.KS), the world's No.3 handset maker, up 3.77 percent.

But defensive issues underperformed following their strong gains in the previous session.

Shares in SK Telecom (017670.KS), South Korea's top mobile phone operator, fell 1.07 percent, and KT (030200.KS), South Korea's top fixed-line operator, shed 1.19 percent.

Institutions sold a net 73.8 billion won worth of stocks, and foreign investors bought a net 130 billion won.

Retail investors offloaded a net 24.8 billion won worth of stocks.

Advancers outnumbered decliners 441 to 325 with 103 issues ending flat.

Trading volume stood at 473.3 million shares worth 5.4 trillion won, compared with 439.8 million shares worth 5.6 trillion won in the previous session.

The KOSPI 200 March futures index KSc1 ended up 2.60 points at 215.15, and the KOSPI 200 spot index .KS200 rose 2.65 points to 215.67.

The junior Kosdaq market .KQ11 gained 0.19 percent to close at 517.40.

Move on day +1.04 percent

12-month high 1,723.17 23 SEPT 2009

12-month low 992.69 3 MAR 2009

Change on yr -2.40 percent

All-time high 2,085.45 1 NOV 2007

All-time low 93.10 6 JAN 1981

(Editing by Jonathan Hopfner)