The recommendation means that investors should hold fewer bank stocks than are represented in their benchmark index.
In Japan, banks such as Mizuho Financial Group Inc fell partly on concern that the country's ruling Liberal Democratic Party may lose its majority in Sunday's lower house general election, giving power to the Democratic Party of Japan, which is advocating a tougher government stance on bank reform.
Mizuho Financial Group Inc, Japan's largest bank by assets, tumbled 7.1 percent to ¥19,000. Sumitomo Mitsui Financial Group Inc, the nation's No. 2 lender, lost 4.7 percent to ¥527,000.
"The election is a concern for the market in that the LDP may lose its majority, which may change the policy stance," said Akio Yoshino, who helps manage the equivalent of US$15 billion in assets at SG Yamaichi Asset Management Co in Tokyo.
"What the Democratic Party has in mind for rebuilding the financial system looks a lot more rigorous than what banks have planned," Yoshino said.
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