Australia shares fall 8 pct, bleakest day since '87

(Adds comment, moving stocks)

MELBOURNE, Oct 10 (Reuters) - Australian shares tumbled 8 percent on Friday, the biggest one-day slide since the 1987 stock market crash, as fears of global recession sparked panic selling.

Shares slid across the board, with heavyweight lenders and mining stocks all coming under heavy attack, in tune with a broad sell-off of markets across Asia.

Australia's benchmark S&P/ASX 200 <.AXJO> fell 360.2 points to close at 3,960.7, according to the latest available data, the first close below 4,000 since May 2005 and only the second time since 1987 the market has lost over 8 percent at the close.

Australian shares fell 16 percent over the week.

The major banks lost 6 to 12 percent of their market value as investors discounted the efforts of developed countries to restore confidence in the global financial system.

"No one's thinking of fundamentals at the moment. Australian banks are very well capitalised, very well regulated...but no one's paying any attention," said Lucinda Chan, client adviser at Macquarie. "You're going to see a lot of people losing money big time. They just want to know where it's all going to end," she added.

National Australia Bank <NAB.AX> ended down 12 percent at A$20.80 and ANZ down 8 percent at A$15.30. Commonwealth Bank of Australia <CBA.AX> fell 6.70 percent to A$39.55.

"This is going to last at least another 12 to 18 months until we see some resemblance of stability or normality as we know it," Commonwealth Bank Chief Executive Ralph Norris told Reuters on Thursday, adding that he had "given up picking the bottom".

Shares in global miner BHP Billiton Ltd/Plc <BHP.AX> dived 7 percent to A$27.74 with copper slumping 9 percent as metal prices were hit by the panic affecting stocks.

Eight stocks in the index lost more than 20 percent.

Normally defensive stocks such as supermarket operators Woolworths <WOW.AX> and Wesfarmers <WES.AX> were not immune from the slide, falling 11 percent and 13 percent respectively.

Brewer Foster's <FGL.AX> lost 6.5 percent to A$5.35.

"It's rather irrational at the moment. The governments of the world are really on the end of a precipice, it really is unchartered waters," said Chan.

In New Zealand, shares fell 4.8 percent, the benchmark NZX-50 index <.NZ50> finishing down 139.08 dex <.NZ50> at 2,805.31. The index touched a four-year low of 2,803.46 in late trade.

The drop was the greatest daily percentage fall since Sept. 12, 2001. ($1=A$1.50)

(Reporting by Miranda Maxwell, Editing by Mark Bendeich)