Seoul shares fall led by banks; N.Korea worries weigh

* KOSPI loses 1.13 pct

* Banks fall, led by Hana Financial Group

* STX Offshore rallies on order news

(Updates to close)

By Jungyoun Park

SEOUL, June 15 (Reuters) - Seoul shares fell on Monday, led
by banking issues such as Hana Financial Group (086790.KS), with
renewed concerns about growing tension in North Korea adding
further pressure to the shares.

The Korea Composite Stock Price Index (KOSPI)
finished down 1.13 percent at 1,412.42 points.

"Buying appetite has weakened. Both institutions and foreign
investors are selling, following their latest streak of buying,"
said Park Suk-hyun, a market analyst at KTB Securities.

Foreign investors turned net sellers after a six consecutive
session buying streak, offloading a net 56.3 billion won ($44.68
million). Institutions sold a net 409 billion won.

"Growing tension in North Korea and an increasingly
aggressive tone taken up by the United Nations and United States
have heightened South Korea's geopolitical risks and dampened
sentiment," Park added.

North Korea said on Saturday it would start a uranium
enrichment program and weaponize all its plutonium in response
to fresh U.N. sanctions, which the United States said it would
work vigorously to enforce.[ID:nSP422357]

Defense issues including Victek (065450.KQ) and Huneed
Technologies (005870.KS) spiked 15 percent and 14.58 percent
respectively.

Losses were led by banks, with Hana Financial Group
(086790.KS) falling 4.81 percent.

"I have been getting questions about a rights issuance by
Hana Financial. Although the company is adamantly denying it,
such talk seems to be affecting the shares," said an analyst who
declined to be named.

Shinhan Financial Group (055550.KS) lost 1.62 percent and
Woori Finance Holdings (053000.KS) declined 1.84 percent.

But exporters outperformed on the back of a weaker won
currency KRW=, with Hynix Semiconductor (000660.KS), the
world's No.2 memory chip maker, rising 2.32 percent and LG
Electronics (066570.KS), the world's No.3 handset maker, ending
flat.

Shares related to Kumho Asiana Group also outperformed after
the company said on Sunday it was selling stakes in affiliates
Asiana IDT, Kumho Auto Lease and a stake in the Beijing
Lufthansa Center building complex owned by Daewoo Engineering &
Construction (047040.KS), which the group purchased in 2006.

The group said it expected to secure nearly 240 billion won
($192.2 million) from the sales.

Kumho Industrial (002990.KS) edged 0.8 percent lower, while
Asiana Airlines (020560.KS) ended flat.

But Daewoo Motor Sales (004550.KS) tumbled 4.68 percent
after the company said in a filing to the Korea Exchange that it
was issuing 13 million new shares worth nearly 107 billion won
($85.69 million).

However STX Offshore & Shipbuilding (067250.KS) gained 3.07
percent after the shipbuilder said on Monday it had won $340
million in orders to build tankers for an unidentified European
company. [ID:nSEO23635]

Defensive issues also outperformed, tracking their U.S.
peers, with SK Telecom (017670.KS), South Korea's top mobile
phone operator, rising 1.7 percent and KT&G (033780.KS), a
tobacco monopoly, advancing 0.42 percent.

(Editing by Ken Wills)
($1=1260.0 Won)