Nikkei index falls as banking stocks are affected by the collapse of Silicon Valley

Japan’s Nikkei fell more than 1 percent on Monday, with banks leading the losses as investors fretted over the potential repercussions of the collapse of the US bank Silicon Valley.

Automakers also fell under pressure from a strong yen, with Mitsubishi Motors leading the decline.

The Nikkei index fell 1.11 percent to 27,832.96 at the close, although it remained far from the lowest level during the day of 27,631.53, which is the weakest since the second of March.

The broader Topix index fell 1.5 percent to 2000.99, after earlier touching 1987.00 for the first time since the first of March.

The banking sector was the worst performer among 33 industry groups, dropping 4.01 percent, followed by the insurance and securities sectors, which fell 3.66 percent and 2.82 percent, respectively.

Japan’s top government spokesman tried to allay fears about the fallout from the Silicon Valley collapse, saying he did not see it affecting Japanese lenders.

Transportation equipment makers fell 2.34 percent as the yen rose to a one-month high against the dollar.

The domestic plunge followed chaos on Wall Street on Friday, as bank stocks plunged after Silicon Valley Bank became the biggest bank collapse since the financial crisis.

Concordia financial group was the worst-performing lender on the Nikkei index, down 5.29 percent. Mizuho shares fell 4.94 percent.

Mitsubishi Motors topped the losers on the Nikkei index, down 6.46 percent, followed by Mazda, which fell 5.96 percent. Nissan shares fell 4.95 percent.