Asia markets fall as bank stocks retreat on Wall Street

Asia-Pacific markets saw a sell-off on Wednesday, mirroring moves on Wall Street after a decline in U.S. banks.

Shares of JPMorgan Chase and Wells Fargo dropped 2%, and Bank of America dropped 3%. The action came after Fitch warned it may have to downgrade credit rating dozens of banks, including JPMorgan Chase.

Last week, Moody’s lowered its rating on 10 U.S. banks while putting other big institutions on a watchlist for potential downgrades.

In Asia, Japan’s Nikkei 225 slid 1.46% to end at 31,766, the first time it has went below the 32,000 mark in over a month, while the Topix closed down 1.29% at 2,260.84. This is despite business sentiment improving in July, according to the Reuters Tankan survey.

South Korea’s Kospi came back from a public holiday 1.76% down and closed at 2,525.64, while the Kosdaq saw a larger loss of 2.59% and finished at 878.29, its lowest level since July 11.

In Australia, the S&P/ASX 200 slipped 1.5%, closing at 7,195 and notching its third day of losses in four days.

Hong Kong’s Hang Seng index fell 1.05%. while mainland Chinese markets were also lower with the CSI 300 index 0.35% down. China saw its house price index fall into contraction territory for the first time since April, dropping 0.1% year on year.

Overnight in the U.S., all three major indexes lost ground, with the S&P 500 falling 1.16% and ending the session below its 50-day moving average. The Nasdaq Composite fell 1.14%, and the Dow Jones Industrial Average slid 1.02% and snapped a three-day positive streak.

— CNBC’s Hakyung Kim and Samantha Subin contributed to this report.