Index suffers 124-pt drop on China woes

MANILA, Philippines - Shares prices plunged yesterday, sending the benchmark stock barometer back to the 6,000 level.

“Local equities slumped with stocks in the rest of the region after China’s flash PMI reading failed to meet expectations,” said Jason Escartin of F. Yap Securities.

The benchmark Philippine Stock Exchange index (PSEi) plunged 124.32 points, or 1.76 percent, to close at 6,926.91, while the broader All-Shares index declined 38.47 points, or 0.95 percent to 3,995.09.

Elsewhere in the region, Asian stocks tumbled after China’s official manufacturing purchasing managers’ index (PMI) edged down to 47 in September, said to be the lowest since March 2009. In August, the PMI was 49.7.

“The PSEi erased two-thirds of the previous week’s gains trapped in the cycle of pessimism that have engulfed global markets since the rout in Chinese equities and the recent US Fed’s decision to keep rates at near zero levels despite encoring domestic economic data. Markets across Asia have also dug a hole,” said Justino Calaycay of Accord Capital.

As a result, the Shanghai Composite index closed lower in the final 30 minutes of trading, closing 2.2 percent lower, with the selling of shares concentrated among blue chips.