Japan’s Nikkei fell on Thursday, with banking stocks sliding after disappointing earnings forecasts and losses in US financial shares.
Selling in large market cap stocks such as SoftBank and Fanuc also dented the market.
The Nikkei share average dropped 0.5 per cent to 21,728.34 points by midmorning.
Analysts said investors were disappointed after Japanese mega banks which reported their second-quarter earnings on the previous day did not raise their annual forecasts.
The banking sector was the worst sectoral performer, tumbling 2.4 per cent, reports Reuters.
Sumitomo Mitsui Financial Group dropped 3.0 per cent, while Mizuho Financial Group shed 1.8 per cent.
SMFG posted a 37 per cent rise in its second-quarter net profit, but it kept its profit forecast at 700 billion yen for the year ending March, below the 751.9 billion yen average of 14 analyst estimates compiled by Refinitiv.
Mizuho reported flat growth in net profit in the three months through September, and kept its profit forecast at 570 billion yen, down 1.1 per cent from the year prior but above the 567.1 billion yen average of 14 analyst estimates compiled by Refinitiv.
A sell-off in the US financial sector overnight added to the market’s sour mood.
US financial shares were hit by fears that regulations on the banking industry would tighten once the Democratic Party takes control of the US House of Representatives.
Index-heavy SoftBank Group Corp declined 3.3 per cent and Fanuc Ltd shed 2.4 per cent, taking off a hefty 42 negative points from the Nikkei benchmark index.
Bucking the weakness, Amada Holdings jumped 10 per cent after the metal press products maker raised its operating profit forecast for the year through March to 43 billion yen from 40.5 billion yen.
It also said it would buy back up to 10 billion of its own shares, or 2.73 per cent of shares outstanding.
The broader Topix shed 0.4 per cent to 1,634.55.