Seoul shares fall led by banks;Daewoo Ship rises

* KOSPI dips 0.56 pct

* Banks continue falling after capital-raising reports

* Daewoo Shipbuilding rises after order news

(Updates to mid-morning)

By Jungyoun Park

SEOUL, June 4 (Reuters) - Seoul shares retreated on Thursday
after Wall Street suffered losses overnight on U.S. job data
pointing to more weakness in the world's largest economy, while
banks continued to fall on capital-raising reports.

The Korea Composite Stock Price Index (KOSPI) was
down 0.56 percent at 1,406.90 points as of 0207 GMT.

"Both foreign and institutional investors are selling now. It
seems the U.S. jobs data is weighing," said Hwang Keum-dan, a
market analyst at Samsung Securities.

The United States may have hit a bump on the road to economic
recovery, according to data released on Wednesday, with half a
million private sector jobs lost in May and mortgage applications
falling last week.[ID:nN03345672]

Institutions offloaded a net 73.7 billion won ($59.81
million) worth of shares and foreign investors were net sellers
of 101 billion won.

"We are in a technical correction period. Foreign investors
are takin a breather following their buying streak, and with
futures and options expiry next week, some volatility is
expected," Hwang added.

Banking issues continued to fall after reports on Wednesday
that some were moving to raise capital.

KB Financial Group (105560.KS), parent of top South Korean
bank Kookmin, said on Wednesday it might sell new shares to raise
capital and local media reported others might follow
suit.[ID:nSEO249141]

Shares in KB Financial shed 2.95 percent and Hana Financial
Group (086790.KS) sank 4.8 percent.

Shares in Samsung Securities (016360.KS) lost 3.38 percent
after the regulatory Financial Supervisory Service reprimanded
the country's most valuable brokerage for what the regulator said
was violating banking rules by allowing "borrowed name" accounts
for parent Samsung Group [SAGR.UL].

But Daewoo Shipbuilding & Marine Engineering (042660.KS) rose
2.13 percent after the shipbuilder said it had won a barge vessel
order from the Netherlands, its first ship order this year,
according to a company spokesman. It declined to disclose the
order's value.

Samsung Electronics (005930.KS) advanced 1.63 percent after
Goldman Sachs raised its target price by 1.2 percent to 824,000
won and retained its "buy" rating on the world's No.1 memory chip
maker.

Goldman added that it has raised its earnings per share
forecasts for fiscal 2009 and 2010 by 7 percent and 6 percent
respectively to reflect increasing average sales prices of
handsets.

(Additional reporting by Kim Yeon-hee; Editing by Jonathan
Hopfner)