(Updates to midday)
* KOSPI poised to finish lower for 4th straight day
* Foreign investors' net selling weighs on index
* Construction, shipbuilding sectors underperform
SEOUL, Dec 13 (Reuters) - Seoul shares fell to their lowest point in three months on Friday morning, extending losses into a fourth session as investors fretted about a possible early reduction in the U.S. Federal Reserve's stimulus.
The Korea Composite Stock Price Index (KOSPI) was down 0.5 percent at 1,958.46 points by 0207 GMT, its lowest intraday level since Sept. 6.
"The Fed tapering is continuing to be the talk of the market because it's unfamiliar territory for investors," said Shinhan Investment & Securities analyst Han Beom-ho.
"The recent skid has lowered valuations of local stocks, low enough to bolster bargain hunting for a modest rebound," Han added.
Wall Street stocks finished weaker for a third straight day after stronger-than-expected U.S. retail sales data added to signs that the economy is strong enough for the Fed to begin reducing the pace of monetary stimulus.
Foreign investors sold a net 89.5 billion won ($85 million) of local shares by late morning after selling a net 607.1 billion won worth the previous day - the most in six months.
Declining shares outnumbered gainers 482 to 266, with heavyweight Samsung Electronics Co Ltd among the decliners, down 0.9 percent.
Mobile carrier SK Telecom Co Ltd fell 1.6 percent and KB Financial Group Inc dropped 1.2 percent.
Construction and shipbuilding were the biggest sectoral losers. GS Engineering & Construction Corp tumbled 3.2 percent and Hyundai Heavy Industries Co Ltd, the world's largest shipbuilder, slid 3 percent.
The KOSPI 200 benchmark of core stocks and the junior KOSDAQ both edged 0.5 percent lower.
Meanwhile, North Korea on Friday said Jang Song Thaek, the uncle of its leader and previously considered the second most powerful figure, has been executed for treason, but analysts said the impact on Seoul markets was limited. ($1 = 1051.0500 Korean won) (Reporting by Jungmin Jang; Editing by Chris Gallagher)