Babcock & Brown stung after stock plunges

Babcock & Brown, Australia's second-biggest securities firm, had their rating cut to "neutral" from "buy" at UBS AG after the stock yesterday plunged by a record amount.

The firm's share price slumped 28 per cent yesterday as the overall Australian market dropped 2.3 per cent in response to steep falls in New York and Europe.

An advance of 0.7 per cent on Australia's overnight futures market suggests there will be gains on the ASX sharemarket later today.

The plunge pushed its market value to a level that may trigger a review of agreements on A$2.8 billion of debt.

- RADIO AUSTRALIA