Japan's Nikkei share average dropped on Monday, tracking Wall Street's slump, as worries about recession and a potential global banking sector crisis hurt demand for risk assets despite a weekend rescue deal for Swiss lender Credit Suisse.

The Nikkei index lost 0.83% to 27,106.34 by the midday break. The broader Topix slipped 0.90% to 1,941.87.

"I had thought the news about rescue for Credit Suisse would be positive for the market, but it fell deeper than I expected," said Shigetoshi Kamada, general manager at the research department at Tachibana Securities.

"Global investors stay away from risk assets right now so the Japanese market declines in line with that trend."

In a crisis that began with the collapse of U.S.-based Silicon Valley Bank last Friday, investors lost confidence in U.S. regional banks and Credit Suisse in Europe.

Wall Street closed lower on Friday, with three main indexes ended the session deep in negative territory, with financial stocks down the most among the major sectors of the S&P 500.

Over the weekend, UBS Group AG said it will buy Credit Suisse for 3 billion francs ($3.2 billion) and assume up to $5.4 billion in losses, in a shotgun merger engineered by Swiss authorities.

In Japan, the banking sector index on the Tokyo Stock Exchange lost 0.92% after jumping more than 1% earlier in the session.

Mitsubishi UFJ Financial Group lost 0.77% and Sumitomo Mitsui Financial Group slipped 0.51%. Mizuho Financial Group fell 1.45%.

Uniqlo brand owner Fast Retailing lost 1.97%. Chip-making equipment maker Tokyo Electron and chip-testing equipment maker Advantest slipped 1.73% and 0.68%, respectively.

Bucking the trend, oil refiners rose 0.44%. Idemitsu Kosan advanced 1.20% to become the best performer on the Nikkei.

(Reporting by Junko Fujita; Editing by Sherry Jacob-Phillips)