(Updates to midday)
* KOSPI lower after 3-day winning streak
* IBK drops after govt unveils plan to sell part of stake
* Retailers gain on hopes of increased consumption
SEOUL, Nov 26 (Reuters) - Seoul shares edged lower on Wednesday morning, poised to break a three-day winning streak, after a drop in U.S. consumer sentiment raised concerns about holiday spending in South Korea's second-biggest export market.
The Korea Composite Stock Price Index (KOSPI) was 0.4 percent lower at 2,013.88 points as of 0216 GMT after touching an intraday low of 2,010.84.
"The fall in the U.S. consumer confidence reading ahead of the Thanksgiving holiday has splashed cold water on risk sentiment," said Choi Kwang-hyeok, an analyst at E-Trade Securities.
"With the stock market's tendency of pricing in a factor early on and by a large proportion, a disappointing hint of holiday consumption will drag down the market."
A private sector report on Tuesday showed U.S. consumer confidence fell to 70.4 in November, below the expected reading of 72.9 in a Reuters poll.
Sentiment was further hurt after an index measuring South Korean manufacturers' assessment of business conditions for December fell from a 22-month high in November, underlining the uneven nature of the economy's recovery.
Foreign investors sold a net 70.9 billion won ($66.9 million) early in the session, after net purchasing local shares in the past two days.
Industrial Bank of Korea (IBK) dropped 4.2 percent after the government revealed its plan to sell part of its stake in the bank for $250 million. The country's finance ministry owns a 68.9 percent stake in IBK, worth about $4.3 billion.
Samsung Electronics Co Ltd, the largest component in the KOSPI, slipped 0.9 percent as some investors locked in gains from a 2.7 percent rise in the previous three sessions.
Retail firms advanced on prospects of increased sales ahead of the year-end shopping season, with GS Home Shopping Inc and Hyundai Home Shopping Network Corp rising 5.3 percent and 2.3 percent, respectively.
Daelim Industrial Co Ltd rose 2.2 percent on hopes of improved profits. The company announced on Tuesday it won a 1.1 trillion won contract with Oman Refineries and Petrochemical Industries Company LLC to build refineries.
Declining shares outnumbered winners 444 to 320.
The KOSPI 200 benchmark of core stocks was down 0.5 percent, while the junior KOSDAQ edged 0.2 percent higher. ($1 = 1059.9500 Korean won) (Reporting by Jungmin Jang; Editing by Chris Gallagher)