S.Korean shares hit as KT&G, shipbuilders drop

SEOUL Dec 5 (Reuters) - Seoul stocks fell 0.4 percent on Tuesday as KT&G suffered its biggest drop in three months after U.S. investor Carl Icahn was said to have sold most of his stake in the tobacco company, creating concerns about share overhang.

Shipbuilders such as Hyundai Heavy Industries Co. (009540.KS: 株価, 企業情報, レポート) dropped after Morgan Stanley initiated the South Korean sector with a "cautious" view,

The benchmark Korea Composite Stock Price Index (KOSPI) .KS11 fell 0.41 percent to end at 1,420.59 points.

KT&G (033780.KS: 株価, 企業情報, レポート) fell 4.12 percent to 60,500 won, marking its biggest one-day percentage fall since Aug. 28.

((Reporting by Rafael Nam, editing by Keiron Henderson; Reuters Messaging: rafael.nam.reuters.com@reuters.net; Email: rafael.nam@reuters.com; Tel: +822 3704 5644)) Keywords: MARKETS KOREA STOCKS CLOSE

ASIA-PACIFIC STOCK MARKETS: Pan-Asia........[STXNEWS/AS] Japan.......[.T] S.Korea...[.KS] S.E. Asia.......[.SO] Hong Kong...[.HK] Taiwan....[.TW] Australia/NZ....[.AX] India.......[.BO] China.....[.SS]

OTHER MARKETS: Wall Street ....[.N] Gold.......[GOL/] Currency.[FRX/] Eurostocks......[.EU] Oil .......[O/R] JP bonds..[JP/] ADR Report .....[ADR/] LME metals.[MET/L] US bonds..[US/] Stocks News US..[STXNEWS/US] Stocks News Europe [STXNEWS/EU]