* Australia benchmark falls sharply after Trump speech
* Top lender CBA slumps to seven-year low
* Drugmaker CSL falls most in over 5 years (Updates with reaction to U.S. travel ban)
By Pranav A K
March 12 (Reuters) - Australian shares fell on Thursday by the most since the 2008 financial crisis after the United States stunned markets with a temporary travel ban from Europe amid mounting worries over the fast-spreading coronavirus.
The S&P/ASX 200 index .AXJO plunged 7.6% to 5,290 in a knee-jerk reaction to U.S. President Donald Trump's address to the nation.
The benchmark has now sunk deeper into bear market territory, declining 25.6% since scaling a record high on Feb. 20.
Trump suspended all travel from Europe to the United States, except for the United Kingdom, for 30 days starting on Friday to contain the spread of the outbreak. that the travel ban would hit global growth, and lack of significant economic measures to limit the outbreak's impact prompted investors to cut exposure to riskier assets.
CMC Markets' chief market strategist, Michael McCarthy, said it had become clear that Trump can't deliver on his major promise, the payroll tax cut, on his own.
"This has removed any hopes to see a swift and strong reaction from the U.S," he said, adding that traders and investors in Australia were focussing on global response, instead of local measures.
Heavyweight financials .AXFJ hit their lowest since November 2012, with all the Big Four banks in the red.
Commonwealth Bank of Australia CBA.AX , the country's top lender, dropped 6.9% to a seven-year low, while second-largest bank Westpac Banking Corp WBC.AX fell about 7.4% to a more than eight-year low.
Mining stocks .AXMM slumped nearly 7%, with BHP Group BHP.AX and Rio Tinto (LON:RIO) Ltd RIO.AX shedding 7.6% and 6.5%, respectively.
Energy stocks .AXEJ hit their lowest since October 2004, with Woodside Petroleum WPL.AX and Santos Ltd STO.AX declining 10.6% and 11.6%, respectively.
Blue-chip drugmaker CSL Ltd CSL.AX slumped 9.4% in its biggest intraday drop since February 2015.
In New Zealand, the benchmark S&P/NZX 50 index .NZ50 fell 4% to 10,439.81, its lowest in more than six months and extending losses into a fifth session.
Westpac Banking Corp's New Zealand-listed shares WBC.NZ slumped 6.4%, while dairy firm a2 Milk Co ATM.NZ was down 7.2%.