Round-up of South Korean financial markets:

 

** South Korean shares fell on Thursday, weighed by caution over sluggish progress in U.S. debt ceiling negotiations, with limited reaction to the Bank of Korea's interest rate decision that came in as expected.

** The won also weakened but the benchmark bond yield jumped on the central bank's comments against rate-cut bets.

** The benchmark KOSPI closed down 12.76 points, or 0.50%, at 2,554.69.

** Credit-rating firm Fitch put the United States' "AAA" rating on negative watch on Wednesday, saying "risks have risen" that the debt ceiling will not be raised before the so-called X-date, when the Treasury runs out of money.

** "Market sentiment was largely risk-off, with investors focusing on the negotiations," said Daishin Securities analyst Lee Kyoung-min.

** The central bank flagged it may not be done with monetary tightening measures, sending bond yields soaring, after it held rates steady for a third consecutive meeting and trimmed its economic growth forecast for this year.

** Technology giant Samsung Electronics rose 0.44% and peer SK Hynix jumped 5.94%, but they were among just 185 gainers out of 932 traded issues.

** Foreigners were net buyers of shares worth 207.3 billion won ($156.93 million).

** The won ended onshore trade at 1,326.0 per U.S. dollar, 0.65% lower than its previous close.

** In money and debt markets, June futures on three-year treasury bonds fell 0.27 point to 104.31.

** The most liquid three-year Korean treasury bond yield rose by 11.0 basis points to 3.481%, while the benchmark 10-year yield rose by 9.8 basis points to 3.598%. ($1 = 1,320.9300 won) (Reporting by Jihoon Lee; Editing by Christopher Cushing)