* Kia falls 2.5 pct v. Hyundai's 1.5 slip
* LG Elec and Daewoo shipbuilding fall almost 2 pct
* Media and telcos gain as defensive plays
* Doosan E&C jumps 9.1 on hopes for cash
By Somang Yang
SEOUL, Feb 4 (Reuters) - South Korean shares retreated on Monday as the won's strength weighed on big exporters, reversing the market's early gains on the back of a rally on Wall Street.
The Korea Composite Stock Price Index (KOSPI) slipped 0.2 percent to close at 1,953.21 points, falling for a third session and taking the index back towards a one-month low hit on Jan. 28.
"The won has slid slightly from its peak at 1,050 against the dollar but it is still not enough to entice foreign investors to buy or instil confidence in exporters," said Shin Jung-kwan, an analyst at KB Investment & Securities.
The won hit a 17-month high against the dollar on Jan. 11. Although it has weakened roughly 3 percent since then, it is still trading at around 1,085 won to the dollar, stronger than the 1,100-level that is seen encouraging foreign buying of Seoul stocks.
Hyundai Motor fell 1.5 percent while sibling Kia Motors fared worse, shedding 2.5 percent. Together, the two automakers are the world's fifth largest by sales.
"Kia is seen as more vulnerable than Hyundai to currency movements as 60 percent of its production is based in Korea, compared to 40 percent at Hyundai," said Shin.
Other blue-chip exporters also suffered. Gadget-maker LG Electronics fell 1.8 percent while Daewoo Shipbuilding lost 1.7 percent.
However the media and telecoms sub-index bucked the trend, rising 2.1 percent.
"Unlike exporters, telecoms are not affected by the strengthening currency and are thus becoming attractive to investors," said Kim Jang-won, an analyst at IBK Securities.
Among daily movers, Doosan Engineering & Construction surged 9.1 percent after the company said it would raise cash by issuing new shares.
"While a paid-in capital increase is usually bad news for share prices, in this case, investors are hoping that the builder's financial situation will normalise by getting more cash from its largest shareholder," said Han Jong Hyo at Shinyoung Securities, referring to shareholder Doosan Heavy Industries and Construction.
Overall, decliners outnumbered winners 477 to 339.
Foreign investors net bought for the first time in 8 sessions but not enough to offset selling by local institutions.
The KOSPI 200 benchmark of core stocks closed down 0.29 percent, while the junior KOSDAQ edged 0.4 percent lower.
Move on day -0.23 percent
12-month high 2,057.28 14 March 2012
12-month low 1,769.31 25 July 2012
Change on yr -3.83 percent
All-time high 2,231.47 27 April 2011
All-time low 93.10 6 January 1981 (Additional reporting by Seongwon Chang; Editing by Richard Pullin)