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Bank stocks are bearing the brunt of today’s sell-off around Asia, following a sharp drop on Tuesday for their US peers as investors fretted about President Donald Trump’s plans to loosen financial regulations.
Divisions within the Republican party are jeopardising Mr Trump’s effort to repeal Obamacare and have now, in turn, cast doubt on the rest of his pro-business agenda, which includes campaign promises on tax cuts, infrastructure spending and cutting red tape in the financial sector.
US banks took a tumble on Tuesday and the sentiment has spilled into Asia today.
In Japan, the three worst-performing sectors for the Topix, which is down 1.9 per cent, were finance related. Insurers were down 5 per cent, followed by a 3.6 per cent drop for securities and commodity futures trading companies. The banks sector was down 3.1 per cent.
A 2.1 per cent drop for Australia’s financials sector is outpacing the 1.5 per cent fall for the broader S&P/ASX 200. In Hong Kong’s Hang Seng, financials are down 1.6 per cent versus a 1.4 per cent decline for the broader benchmark.