TOKYO, March 16 (Xinhua) -- Japan's benchmark Nikkei stock index on Thursday ended lower as fears over the U.S. banking failure spreading to Europe led to a growing risk-averse mood.
The 225-issue Nikkei Stock Average dropped 218.87 points, or 0.80 percent, from Wednesday to close the day at 27,010.61.
The broader Topix index, meanwhile, lost 23.02 points, or 1.17 percent, to finish at 1,937.10.
Local brokers said the market mood was dented from the very beginning and banking shares took a hit following Credit Suisse's stock tanking on Wednesday, owing to reports saying its top investor would discontinue further investment on concerns that the financial mayhem in the U.S. banking sector could spread to Europe.
The embattled Credit Suisse announced it had found "material weakness" in some of its financial reporting, which added to contagion concerns triggered by the collapse of U.S. lenders Silicon Valley Bank and Signature Bank, they added.
"There is a possibility that some Japanese banks might be affected by the trouble of the major bank, although we have yet to see the whole picture, such as the amount of credit extended to the Swiss bank by Japanese banks," Masahiro Yamaguchi, head of investment research at SMBC Trust Bank, was quoted as saying.
"Still, at this moment, we don't have to think about the collapse of Credit Suisse and it leading to the failure of Japanese banks," Yamaguchi said.
Adding to the downbeat mood and stocking concerns over the possibility of a global financial crisis, Nomura Securities Co.'s strategist Maki Sawada said that S&P Global Ratings' lowering its credit rating for the San Francisco-based First Republic Bank to junk status on Wednesday was another contributor to the growing risk-averse mood.
Among banking shares taking a hit on Thursday, Mitsubishi UFJ Financial Group dropped 2.8 percent, while Mizuho Financial Group fell 3.8 percent.
By the close of play, bank, insurance, and iron and steel-oriented shares comprised those that declined the most.
The turnover on the penultimate trading day of the week came to 3,548.86 billion yen (26.70 billion U.S. dollars). ■