TOKYO: Japan's blue-chip Nikkei index dropped nearly 1 per cent on Monday as investors sold equities following an escalation of violence in the Middle East and a sell-off on Wall Street at the end of last week.
Shares in Japanese banks and brokerages slid following lacklustre earnings reports from the likes of JPMorgan Chase and Wells Fargo, while local chip-sector stocks also tracked their U.S. peers lower.
Domestic earnings produced some outsized losers as well, with drugmaker Astellas and department store operator Takashimaya tumbling close to 6 per cent each.
The Nikkei lost 0.97 per cent to 39,138.22 as of 0207 GMT, though that was well off early losses of as steep as 1.78 per cent.
The broader Topix sagged 0.37 per cent.
An already sombre backdrop from losses of more than 1 per cent across the major Wall Street benchmarks on Friday became even more gloomy after Iran launched an unprecedented attack on Israeli territory over the weekend.
"The risk-off mood is really pushing down on Japanese equities," said Kazuo Kamitani, an equities strategist at Nomura Securities.
However, with the Nikkei's 25-day moving average set to move upwards from Tuesday as higher prices from before March 8 factor out, the technical picture is due to turn more positive, Kamitani said.
"Even though losses today probably can't be helped, from tomorrow onwards, Japanese stocks can turn higher," he said.
Of the Nikkei's 225 components, 181 fell versus 44 that rose.
Chip-making equipment giant Tokyo Electron was the biggest drag by index points with a 1.32 per cent decline. Chip-testing machinery maker Advantest dropped 2.19 per cent.
Daiwa Securities was the worst-performing financial stock on the Nikkei, down 1.82 per cent. Securities firms were among the worst-performing industry groups on the Tokyo Stock Exchange, dropping 1.2 per cent. Banks fell 0.74 per cent.
Astellas pulled pharma to the bottom of the list, with a 1.89 per cent slide for the sector.
Meanwhile, shippers and oil companies rose amid escalating Middle East tensions, adding 1.03 per cent and 0.53 per cent respectively. - Reuters