SYDNEY, Australia - Stocks in Asia were mixed on Thursday with good gains being made by markets in China, while in Japan and Australia the major indices sank.

The U.S. dollar was little changed during Asian trading.

Australian and New Zealand banks were hit hard after the Reserve Bank of New Zealand demanded the country's banks not declare dividends this year. The Australian government may well follow suit spooking the Australian banking sector.

Significant dividend cuts are likely from the banking sector and it is our belief that smaller banks will be hurt more than larger banks, due to thinner margins and narrower funding avenues, Dr Don Hamson, managing director at Plato Investment Management told The Sydney Morning Herald Thursday.

All of Australia's big four banks shed more than 3.8%, led by NAB, which tumbled 5.6% to $16.00.

In Japan, the Nikkei 225 dived 246.69 points or 1.37% to 17,818.72.

The Australian All Ordinaries fell 102.00 points or 1.93% to 5,188.70.

China's Shanghai Composite was off 46.12 points or 1.69% to 2,780.64.

The Hang Seng in Hong Kong went against the trend, rising 194.27 points or 0.84% to 23,280.06.

The euro traded in a tight range in Asia on Thursday. Around the Sydney close the unit was chnaging hands at 1.0949.

The British pound too was largely unchanged, although a little stronger at 1.2411.

The Japanese yen drifted down a few points to 107.22

The Swiss franc was unmoved at 0.9659.

The Canadian dollar weakened a tad to 1.4109.

The Australian dollar firmed to 0.6116, while the New Zealand dollar rose half-a-cent to 0.5972.

Overnight on Wall Street, the Dow Jones Industrial Average was down 973.65 points, or 4.44%, at 20,943.51.

The Standard and Poor's 500 fell 114.09 points, or 4.41%, to 2,470.50.

The Nasdaq Composite lost 339.52 points, or 4.41%, to 7,360.58.