* KOSPI falls nearly 2%, biggest drop since mid-March

* Korean won weakens by over 1% against dollar

* South Korea benchmark bond yield rises

* For the midday report, please click

SEOUL, Aug 2 (Reuters) - Round-up of South Korean financial markets:

** South Korean shares and currency plunged on Wednesday as risk appetite dampened after an unexpected downgrade in the U.S. government's credit rating by Fitch.

** The benchmark KOSPI closed down 50.60 points, or 1.90%, at 2,616.47.

** It was the benchmark's biggest fall since March 14 and followed four consecutive sessions of gains, which had led the index to the highest level in 14 months.

** The won ended onshore trade 1.13% lower at 1,298.5 per dollar.

** The currency fell to the weakest level since July 11 and posted the biggest one-day loss since March 24.

** The fall came even as the vice finance minister issued a comment that authorities would step up monitoring of the foreign exchange market and take measures in case of increased volatility.

** Rating agency Fitch on Tuesday downgraded the U.S. government's top credit rating, a move that drew an angry response from the White House and surprised investors.

** "It is judged that the downgrade provided an excuse for short-term profit-taking in the stock market, after recent trends of Asian markets outperforming U.S. and European peers," said Lee Kyoung-min, an analyst at Daishin Securities.

** South Korea's consumer inflation cooled more than expected in July to its slowest in 25 months, supporting market views that the monetary tightening cycle was over contrary to the central bank's hawkish rhetoric.

** On the main stock bourse, all of the top 10 index heavyweights fell by at least 1.6%. Of the total 934 issues traded, only 232 shares rose.

** Foreigners were net sellers of shares worth 81.5 billion won ($62.81 million).

** In money and debt markets, September futures on three-year treasury bonds fell 0.10 point to 103.65.

** The most liquid three-year Korean treasury bond yield rose 3.2 basis points to 3.678%, while the benchmark 10-year yield climbed 6.7 basis points to 3.790%.

($1 = 1,297.6300 won) (Reporting by Jihoon Lee; Editing by Sherry Jacob-Phillips)