Financial stocks all trounce and no bounce

Macquarie Group was caught in the cross hairs of the investor firing line yesterday, with shares slashed over ten per cent, thanks to the collapse of American investment bank Lehman Brothers.

The Macquarie closing share price of $39.46 was the lowest in almost four years, with the flirtation of a three-figured share price from back in May 2007, when Macquarie Bank peaked at $98.64, a faint and distant memory.

The current Macquarie share price values the company at $11 billion, or one fifth of Commonwealth Bank's market capitalisation of $56 billion, and almost embarrassingly 50 per cent smaller than the $17 billion St George value.

The broader market staged something of a recovery during the day, with the All Ordinaries down 1.7 per cent to 4,875 points, but the Financials Index plunged 3.5 per cent to 4,558 points.

Of the major banks, National was the hardest hit, down almost five per cent or $1.14 to $22.82, with Commonwealth off a dollar or 2.4 per cent to $41.98.

Westpac was relatively unscathed, shedding 37 cents to $23.15, with merger partner St George down two per cent to $30.34.

Suncorp fell 6.7 per cent to $9.50, with AMP in freefall, down eight per cent to $6.83.

The Babcock & Brown pain intensified with a 17 per cent fall to $1.58, which is almost a twentieth of the $31.08 twelve-month high, with the current market capitalisation around just $550 million.