* Financials lead loss; banking sector down 2.1 pct
* Strong currency pressures techs and shipbuilders
* SK Hynix, LG Display fall on Q1 worries
By Somang Yang
SEOUL, Feb 5 (Reuters) - South Korean shares slipped for a fourth straight day to a two-month closing low on Tuesday, with banking and other financial shares succumbing to profit-taking amid weak expectations for earnings.
Political woes in Italy and Spain dampened sentiment for many risk assets this week but Seoul stocks have also been weighed down this year by strength in the won and a slew of corporate earnings that have come in below forecasts.
The Korea Composite Stock Price Index (KOSPI) finished 0.8 percent lower at 1,938.18 points, bringing its year-to-date decline to 2.9 percent.
By contrast, Japan's Nikkei stock average has risen 6.3 percent and Hong Kong's Hang Seng Index has gained 2 percent.
"If you factor in renewed political uncertainty in Europe, this could see the KOSPI finally align with global markets, in that they would both be declining," said Hong Soon-pyo, an analyst at BS Investment & Securities.
Financial stocks led losses, with the sector sub-indexes for banks and securities down 2.1 percent and 1.7 percent respectively.
"Banks were headed for a correction as they considerably outperformed the index in January," said Sohn Joon-beom, an analyst at LIG Securities, noting that banks gained roughly 10 percent while the KOSPI lost 1.8 percent.
"Banks will announce fourth-quarter results from tomorrow, and although expectations are low, they may not even meet these projections."
Stocks in exporters such as tech and shipbuilding declined, with chipmaker SK Hynix shedding 2.5 percent and panel maker LG Display losing 1.78 percent.
"SK Hynix and LG Display are major suppliers to Apple Inc, and have been struggling ever since Apple's lacklustre fourth-quarter results," said Kim Young-chan, an analyst at Shinhan Investment & Securities.
"Now, earnings expectations for the first quarter, a cyclically bad time for tech firms, are being cut as well."
Decliners outnumbered gainers, 604 to 217.
Local institutions sold a net 132 billion won ($121.7 million) worth of KOSPI shares, weighing on the main board.
The KOSPI 200 benchmark of core stocks closed down 0.8 percent, while the junior KOSDAQ edged 0.6 percent lower.
Move on day -0.77 percent
12-month high 2,057.28 14 March 2012
12-month low 1,769.31 25 July 2012
Change on yr 2.95 percent
All-time high 2,231.47 27 April 2011
All-time low 93.10 6 January 1981 ($1 = 1084.6750 Korean won) (Additional reporting by Seongwon Chang; Editing by Edwina Gibbs)