News Corp is one of Australia’s best-known companies and most widely held shares
Shares of News Corporation, the company owned by Australian billionaire Rupert Murdoch, have dropped almost 6% to a two-year low.
The slide comes as an investigation into phone hacking in the UK has widened and a key figure was arrested.
News Corp owns the two newspapers at the heart of the scandal, The Sun and the now closed News of the World.
In morning trading in Sydney, the shares were down 5.5% at 13.91 Australian dollars (£9.20).
Its shares have lost almost a fifth of their value since the start of July.
News Corp is the parent company of News International, which runs The Sun, the News of the World, The Times and Sunday Times.
On Sunday, ex-News International chief executive Rebekah Brooks was arrested by police in the UK on suspicion of conspiring to intercept communications and on suspicion of corruption.
Mrs Brooks has denied wrongdoing and was released on bail at midnight (2300 GMT).
In another twist, Metropolitan Police Commissioner Sir Paul Stephenson stepped down for his part in the phone hacking scandal.
Sir Paul, Britain’s most senior police officer, was criticised for hiring former News of the World executive Neil Wallis – who was questioned by police as part of the probe into hacking – as an adviser.