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Shares close lower due to U.S. credit rating downgrade, won gains on dollar

Published: 20 May. 2025, 17:52 Updated: 20 May. 2025, 18:17

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,601.80 points on May 20, down 1.62 points, or 0.06 percent, from the previous trading session. [NEWS1]

Shares ended slightly lower Tuesday following the previous session's nearly 1 percent drop sparked by the U.S. credit rating downgrade. The local currency gained against the dollar.

The Kospi dipped 1.62 points, or 0.06 percent, to close at 2,601.80. The index lost 0.89 percent on Monday after Moody's slashed the U.S. sovereign rating to "Aa1" from "Aaa" last week, citing the government's huge debt load.

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Trade volume was moderate at 451 million shares worth 7.57 trillion won ($5.44 billion), with gainers outnumbering decliners 554 to 333.

Foreign investors led the decline, selling a net 114.1 billion won, while individuals bought a net 20.2 billion won and institutions purchased a net 61 billion won.

With the downgraded woes fading in the United States, major stock indexes finished in positive territory.

The Dow Jones Industrial Average rose 0.32 percent, and the S&P 500 inched up 0.09 percent. The tech-heavy Nasdaq Composite climbed 0.02 percent.

In Seoul, major shares closed mixed as gains in semiconductor and energy shares were offset by losses in autos and battery stocks.

Tech giant Samsung Electronics rose 0.18 percent to 55,900 won, and its chipmaking rival SK hynix increased 1.3 percent to 202,000 won.

The state-run Korea Electric Power gained 2.46 percent to 29,100 won, and Korea Gas jumped 3.96 percent to 38,050 won.

Bank shares were also strong as major commercial bank operator Shinhan Financial Group advanced 3.26 percent to 53,800 won and Hana Financial Group added 1.81 percent to 67,600 won.

However, carmakers went south as industry leader Hyundai Motor fell 0.79 percent to 189,500 won and its sister Kia declined 0.33 percent to 91,200 won.

Leading battery maker LG Energy Solution sank 4.12 percent to 279,500 won, and top oil refinery SK Innovation slid 3.65 percent to 84,500 won.

The local currency was quoted at 1,392.4 won against the greenback at 3:30 p.m., up 5.4 won from the previous session.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys dropped 3.6 basis points to 2.33 percent, and the return on the benchmark five-year government bonds declined 3.4 basis points to 2.47 percent.

Yonhap