"The impact from the downgrades themselves was seen limited, as reflected by the limited losses in Wall Street and European shares, but investors seem more concerned about the long-term after-effects. Shares are thus widening falls," said Hong Soon-pyo, a market analyst at Daishin Securities. On Friday, ratings agency Standard & Poor's carried out a ratings cut on nine euro zone countries, stripping France and Austria of their coveted AAA-rating while demoting Italy two notches and pushing it closer to junk status. The Korea Composite Stock Price Index (KOSPI) was down 1.51 percent at 1,847.36 points, poised to end a two-day winning streak and breaking below its 14-day moving average of 1,848.02. Early falls were led by cyclical shares. Daewoo Construction & Engineering tumbled 3.54 percent while GS Construction Co fell 3.56 percent. Brokerage firms followed close behind, with Mirae Asset Securities down 2.65 percent and Samsung Securities shedding 2.45 percent. Large-cap technology issues struggled, with Samsung Electronics Co dropping 1.91 percent while rival LG Electronics Inc retreated 2.09 percent. Shares in Hyundai Merchant Marine Co bucked the losing trend, spiking 10.28 percent on market talk of a possible takeover bid by KCC Corp. "There is speculation that KCC might use the cash from its recent stake sale in Hyundai Heavy Industries to fund a purchase of Hyundai Merchant Marine," said Jee Heon Seok, a senior analyst at NH Investment & Securities. Hankook Tire also outperformed after announcing its global sales had jumped by over 20 percent last year. Offshore investors bought a net 20.5 billion won ($17.9 million) worth of shares, while institutions sold a net 5.8 billion won worth.