Sydney  - Australian stocks fell across the board Thursday, slumping for a second day.

The ASX200 index dropped 138 points, or 2.5 per cent, to 5,329.

Babcock and Brown, the country's second-biggest investment bank, fell more than 20 per cent over concerns that it would founder now that the era of cheap debt is over.

"Babcock and Brown in particular lost the confidence of the market in terms of its ability to run its listed fund model," Sean Fenton, a Tibeca Investment Partners analyst, told the national broadcaster ABC. "A lot of its listed vehicles have problems with excessive debt and refinancing, and that has unnerved investor confidence to an extent." (dpa)