Stocks down for second day over lowered U.S. credit grade

Stocks finished lower for a second day Thursday as a downgraded U.S. credit rating weighed on investor sentiment. The won fell against the dollar. The benchmark Kospi retreated 0.42 percent, or 11.08 points, to 2,605.39.

Screens in Hana Bank's trading room in central Seoul show the Kospi closing at 2,605.39 points on Thursday, down 0.42 percent, or 11.08 points, from the previous trading session. [YONHAP]

Stocks finished lower for a second day Thursday as a downgraded U.S. credit rating weighed on investor sentiment. The won fell against the dollar.

The benchmark Kospi retreated 0.42 percent, or 11.08 points, to 2,605.39. Trading volume was at 773.9 million shares worth 14.6 trillion won ($11.2 billion), with decliners outnumbering gainers 523 to 345.

Foreign investors and institutions sold off shares worth 154.5 billion won and 670.5 billion won respectively, while retail investors bought a total of 812.2 billion won worth of shares.

All three U.S. major stock indexes finished lower Wednesday (U.S. time) as investors took profits on monthslong gains after Fitch Ratings downgraded the U.S. credit grade to AA+ from AAA for the first time since 2011, citing "repeated debt limit standoffs and last-minute resolutions."

The July U.S. jobs report showed private payrolls increased more than expected, indicating continued labor market resilience.

"The Kospi turned lower on downward pressure from foreigners' spot and futures sell-off as U.S. stock markets saw declines in tech shares after the credit downgrading," Mirae Asset Securities analyst Kim Seok-hwan said.

In Seoul, big-cap stocks were mixed.

Samsung Electronics retreated 1.57 percent to 68,800 won, but SK hynix gained 0.42 percent to 120,000 won.

Hyundai Motor dipped 0.42 percent to 191,700 won, while Kia gained 0.88 percent to 80,700 won.

LG Energy Solution dipped 0.18 percent to 543,000 won, and Samsung SDI went down 1.69 percent to 639,000 won.

Posco Holdings rose 1.2 percent to 592,000 won, and Samsung Biologics jumped 2.28 percent to 807,000 won.

Shares related to superconductors jumped after researchers from the Seoul-based Quantum Energy Research Centre claimed they have developed a room-temperature superconductor.

The local currency ended at 1,299.10 won against the dollar, up 0.6 won from the previous session's close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds advanced 1.9 basis points to 3.7 percent, and the yield on the benchmark 10-year government bonds added 5.6 basis points to 4.086 percent.

BY SOHN DONG-JOO, YONHAP [sohn.dongjoo@joongang.co.kr]