Nov. 6 (Bloomberg) -- Norway's benchmark index slumped the most in at least seven years, posting the biggest move among equity markets included in global benchmarks.

StatoilHydro ASA, the country's biggest oil and gas company, Yara International ASA and Norsk Hydro ASA led declines as commodity prices decreased. DnB NOR ASA retreated after Morgan Stanley lowered its recommendation for the largest Norwegian bank.

The OBX Index lost 25.49, or 11 percent, to 213.61, the steepest drop since at least November 2001, as all but one of its constituent stocks declined. The measure has retreated 49 percent so far this year.

StatoilHydro tumbled 10 percent to 129.8 kroner, the steepest decline in 11 months. Crude oil fell to an 18-month low, following equities, on signs that fuel demand will contract as the global economy slows. DNO International ASA, the Norwegian oil company that explores in northern Iraq, decreased 16 percent to 4.62 kroner.

Oil-related stocks make up more than half of the OBX index's market value, with Statoil accounting for 40 percent. The industry contributes about a fifth of the country's $296 billion gross domestic product, according to Statistics Norway's Web site.

Yara, the world's largest fertilizer maker, lost 15 percent to 129.75 kroner, the steepest slide in almost three weeks. Corn fell for a second day as declining equities in the U.S. and Asia raised concern that the global economy was headed toward recession, curbing demand for food, feed and fuel. Wheat also dropped.

DnB NOR

DnB NOR ASA slumped 14 percent, to 34.5 kroner, the largest drop in a month. Norway's biggest bank had its recommendation lowered by Morgan Stanley to ``equal-weight'' from ``overweight.''

``We think it's still too early to buy the banking sector,'' London-based analyst Huw van Steenis wrote in a note to clients, citing lower debt levels, the difficulty of obtaining financing and a weaker economy.

Norsk Hydro, Europe's second-largest aluminum producer, decreased 15 percent to 25.4 kroner, the steepest drop in three weeks. The metal used in construction fell for a second day on the London Metal Exchange.

Norske Skogindustrier ASA lost 7.7 percent to 22.8 kroner, a second day of declines. The world's second-biggest maker of newsprint posted a third-quarter net loss that was bigger than analysts' expectations and reiterated that it is prepared to shut production further as demand falls.

To contact the reporter on this story: Jakob Lindstroem in Stockholm at jlindstroem@bloomberg.net.

Last Updated: November 6, 2008 11:54 EST