Sydney  - Australian stocks slumped in early trading Friday following heavy falls on Wall Street that came after a jump in oil prices.

The All Ordinaries index dropped 153 points, or 2.8 per cent, at the bell.

Banking stocks were hit hardest, with National Australia Bank down 5.8 per cent and ANZ, Westpac and Commonwealth Bank down 4 per cent. Troubled investment bank Babcock & Brown was 6 per cent lower.

Mining giants BHP Billiton and Rio Tinto fell about 3 per cent each.

Commonwealth Bank chief executive Ralph Norris helped talk the market down by predicting that it could be two years before the credit crisis passes. (dpa)