* Profit-taking by locals offsets foreign purchases
* KOSPI slips after touching another 4-week high
* Caution after recent rally, direction unclear
SEOUL, Nov 29 (Reuters) - Seoul shares retreated after hitting a four-week high by midday on Friday as profit-taking by local investors offset persistent but modest foreign purchases in a light trade hit by the holiday in U.S. markets.
The Seoul market's benchmark KOSPI stood at 2,042.03 points, down 0.18 percent on the day, after rising as high as 2,050.70 points. The index had gained 2.6 percent during the past five consecutive sessions.
"Foreign investors keep buying shares but local investors, both retail and institutional ones, are selling to take profit after the market's recent rally," said Kim Soon-young, market analyst at IBK Investment & Securities.
"There's simply no outstanding factor to drive the market after the U.S. market was closed for holiday and after the local market's recent strong rally," she added.
Market heavyweight Samsung Electronics shed 0.6 percent to 1.485 million won by 0235 GMT after hitting a 4-week intraday high at 1.499 million won. Automaker Hyundai Motor was also down 0.6 percent, at 253,500 won.
Investors shrugged off government data early in the day showing South Korea's industrial output expanded in October by slightly more than the market expected but fell short of recovering all of September's loss.
Decliners slightly led advancers 406 to 381, reflecting a lack of consensus among investors about the market's direction even after the recent rally. The KOSPI's relative strength index stood at just above 58, below the 70-point mark, a reading above which suggests the market is overbought.
Foreign investors purchased a net 65.5 billion won ($61.71 million) of local shares by midday, while institutions were net sellers for 37.8 billion won.
($1 = 1061.4500 Korean won) (Reporting by Choonsik Yoo; Editing by Richard Borsuk)