Seoul shares end 0.6 pct lower pressured by banks

* Institutional selling weighs on KOSPI

* Banks decline, hit by CIT news

* Autos rebound after losses; defensives lend support

SEOUL, Nov 3 - Seoul shares ended 0.6 percent lower on Tuesday led by falls in technology and banking issues including Shinhan Financial <055550.KS>, but gains in retail and defensive shares such as KT <030200.KS> lent support.

"There's no doubt that economies have upward momentum, but news of CIT Group's problems has dampened sentiment and is pressuring financials," said Kim Young-june, a market analyst at SK Securities, adding however that investors would eventually shift their focus back to economic recovery signs.

CIT Group, one of the larger U.S. commercial lenders, filed for bankruptcy earlier this week.

Investors were also closely following the U.S. Federal Reserve's upcoming interest rate decision and comments, according to Lee Jin-woo, a market analyst at Mirae Asset Securities, who added that the index would likely move between its 60-day and 120-day moving averages of around 1,600 and 1,540 respectively.

The Korea Composite Stock Price Index <.KS11> (KOSPI) shed 0.59 percent to finish at 1,549.92, pressured by institutional selling of a net 364 billion won ($309.1 million).

Shinhan Financial Group and Korea Exchange Bank (KEB) <004940.KS> declined on the day they posted quarterly results, falling 2.29 percent and 3.76 percent respectively.

Shinhan Financial Group after the market close reported a 52 percent year-on-year jump in quarterly profits on rebounding interest margins and lower bad loan charges.

KEB also said after the closing bell its quarterly net profit nearly tripled.

Some key technology issues also retreated, with LG Electronics <066570.KS>, the world's No.3 handset maker, losing 2.31 percent.

But auto issues rose after massive losses in the previous session, with Hyundai Motor <005380.KS>, South Korea's top automaker, rising 2.94 percent and Kia Motors <000270.KS> advancing 2.83 percent.

Defensive issues also outperformed.

Shares in KT Corp <030200.KS>, South Korea's dominant fixed-line operator and No. 2 mobile carrier, rose 1.03 percent despite posting on Tuesday a 12 percent fall in quarterly operating profit. [ID:nSEO127989]

Lotte Shopping <023530.KS>, South Korea's No.2 retailer by market value, rose 0.9 percent and Hyundai Department Store <069960.KS> advanced 2.24 percent.

Shares in Hyosung <004800.KS> underperformed after leading shareholders in Hynix Semiconductor <000660.KS> said they would extend a deadline for Hyosung's proposal to buy a controlling stake in the world's No.2 memory chip maker by two weeks, after the only contender asked for more time. [ID:nSEO133526]

Hyosung fell 3.24 percent, but Hynix advanced 0.83 percent.