Australia Stocks: National Australia, ANZ, Incitec, Rio, Santos

By Shani Raja

July 25 (Bloomberg) -- The S&P/ASX 200 Index fell 135.60 points, or 2.6 percent, to 5,008.50 at 10:20 a.m. in Sydney, the most in more than a month. The broader All Ordinaries Index declined 119, or 2.3 percent, to 5,069.40, while the futures index expiring in September lost 2.9 percent to 4,992.

Financial stocks: National Australia Bank Ltd. (NAB AU), the country's biggest by assets, tumbled A$3.52, or 12 percent, to A$27.18, the index's biggest loser, after saying it will make an additional provision of A$830 million ($795 million) on its portfolio of collateralized debt obligations. Australia & New Zealand Banking Group Ltd. (ANZ AU), the nation's third-biggest lender, plunged A$1.06, or 5.5 percent, to A$18.39, the most since April 7. Commonwealth Bank of Australia, the nation's biggest mortgage lender, slumped A$2.32, or 5 percent, to A$44.07, the most since March 17.

U.S. stocks tumbled, sending financial shares to their worst drop in eight years, after home sales slid more than forecast and investor Bill Gross predicted the housing slump will cost banks and brokerages $1 trillion. The Standard & Poor's 500 Index dropped the most since June 26, losing 29.65 points, or 2.3 percent, to 1,252.54.

Mining shares: BHP Billiton Ltd. (BHP AU), the world's largest mining company, slipped A$1.20, or 3.2 percent, to A$36.35, the lowest since March 31. Rio Tinto Group (RIO AU), the world's third-largest mining company, dropped A$2.46, or 2.1 percent, to A$112.74, the lowest since Jan. 24.

A measure of six metals traded on the London Metal Exchange declined 2.5 percent. Zinc lost 3.6 percent, copper 2.2 percent and nickel 5.9 percent.

Incitec Pivot Ltd. (IPL AU) plunged A$8.89, or 5.9 percent, to A$140.74, the lowest since April 4. Australia's largest fertilizer maker is considering selling A$1 billion ($959 million) of shares and may use the money to expand, the Australian Financial Review reported, without citing anyone.

Santos Ltd. (STO AU) gained 32 cents, or 1.9 percent, to A$17.30 reversing two straight days of losses. Crude oil rose from a seven-week low as some traders purchased contracts on speculation prices fell too far in the past two weeks. Crude oil for September delivery rose $1.05, or 0.8 percent, to settle at $125.49 a barrel at 3 p.m. on the New York Mercantile Exchange.

To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net