Australia's S&P/ASX 200 Index Slumps on Lehman Funding Concerns

By Shani Raja

Sept. 10 (Bloomberg) -- Australia's stocks fell as Lehman Brothers Holdings Inc. failed to sell a stake to Korea Development Bank, reviving concern about banks worldwide, and commodity stocks dropped after metals and oil prices slumped.

Macquarie Group Ltd., Australia's biggest securities firm, declined 3.8 percent, after the collapse of the Korea Bank deal raised questions about banks' ability to raise capital. BHP Billiton Ltd., the world's biggest mining company, plunged 5.4 percent to its lowest since March 20 after a measure of six metals traded on the London Metal Exchange slipped 2 percent.

Australia's benchmark S&P/ASX 200 Index slipped 117.80 points, or 2.4 percent, to 4,862.30, at 10:25 a.m. Sydney time.

The Australian index has tumbled 23 percent in 2008, compared with the 17 percent fall in the Standard & Poor's 500 Index. Global financial companies have posted losses in excess of $500 billion on a credit contraction, while slowing growth has damped demand for resources.

``Investors in Asia have gone into panic and pray mode,'' said Prasad Patkar, who helps manage the equivalent of about $1.8 billion at Platypus Asset Management in Sydney. ``It's the uncertainty of not knowing when and how it will all end.''

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