Phl stocks tumble on China's cash squeeze

MANILA, Philippines (Xinhua) - China's credit crunch spooked the Philippine stock market today, sending local equities tumbling below the 6,500 level.

The bellwether Philippine Stock Exchange index dived by 2.79 percent or 181.57 points to 6,318.91, while the broader all-share index fell by 2.47 percent or 98.07 points to 3,874.56.

Trading volume reached 1.47 billion shares worth P5.49 billion ($125.66 million) with 122 stocks declining, 33 advancing, and 34 were unchanged.

All six counters were down. The holding firm sector was the bloodiest.

"The composite index started the week in the red, dropping along with most markets in the region on account of China's cash squeeze," DBP-Daiwa Securities, Inc. said.

China's financial system is facing the risk of being stifled as the government tries to restructure the economy.

The cash squeeze has sent global equities diving into the red territory with the local index closing the session at its intra- day low.

"Confidence in China's economic growth has dimmed," analyst Justino Calaycay of Accord Capital Equities Corp. said separately.

Calaycay said the challenge facing the local equities moving forward is what to consider as "good" leads. So far, developments overseas have elicited fears, while the local economy is being overshadowed.

All 20 active stocks finished Monday's session in the negative. Ayala Corp. dropped as much as 4 percent of its value, along with SM Investments Corp., DMCI Holdings, Inc., and Ayala Land, Inc.