Sydney - Australian stocks slumped in early trading Thursday following heavy falls on Wall Street prompted by another rise in the oil price.

The ASX 200 index dropped 105 points, or 2 per cent, at the bell. The market is at its lowest level in two years but made up ground after the opening bell. It was the fifth day of losses.

Banking stocks bucked the trend as traders rotated out of resources stocks. Mining giant BHP Billiton slumped 6 per cent to a three-month low. (dpa)