Shares of Nintendo Co. experienced a significant drop, marking the largest decline in seven months. This downturn is attributed to global funds divesting from top-performing stocks amidst market volatility. Nintendo’s stock fell by as much as 8.4% in Tokyo, reflecting its steepest intraday drop since the market turmoil on August 5. Prior to this decline, the shares had reached an all-time high and had increased by 23% year-to-date. Approximately half of Nintendo’s shares are held by foreign investors.

The sell-off is part of a broader trend where global investors are reducing their positions in Japanese stocks, even in the most attractive holdings. This movement is pressuring even the gaming sector, which had been one of the strongest areas in the Japanese equity market. The Solactive Japan Games & Animation Index, which includes Nintendo, Sony Group Corp., and Bandai Namco Holdings Inc., had risen 14% this year through Thursday, compared to a 1.2% decline in the Topix index.

Sony and Konami Group Corp. also saw significant drops, with Sony shedding as much as 6% and Konami losing 3.8%. Bandai Namco, which had been the best performer among Japan’s largest 100 stocks this year, fell by 2.3%. The pressure on gaming stocks suggests that some investors are selling these stocks to offset losses in other areas.