Mounting concern over the slowdown of the Chinese economy dragged equity markets around the globe, including the Philippine Stock Exchange (PSE), especially after the latest manufacturing output by the second largest economy of the world fell short of expectations.
The PSE index (PSEi) fell 1.76 percent or 124.32 points to close at 6,926.91, while the broader All Shares index dropped 0.95 percent or 38.47 points to 3,995.09.
Jason Escartin, investment analyst at F. Yap Securities Inc., said the local market, along with other markets in the region, was dragged by the lower-than-expected China’s Purchasing Managers Index (PMI) data.
“Local equities slumped with stocks in the rest of the region after China’s flash PMI reading failed to meet expectations,” Escartin said.
A Reuters report said China’s factory segment shrank faster than expected in September, falling to its weakest level in six and a half years as domestic and export demand continued to slump.
Fears about China’s economy drove investors away from equities and into safe haven assets.
The PMI data reads the economic health of a country’s manufacturing sector. China has been at the center of market concern since the second quarter of the year due to its slowing economy and weak equities market. China’s impact on global economic growth has posed risk to its trade with the different economies of the world.
On the PSE, the services sector retreated 2.65 percent.
The most actively traded blue chips posted declines, including Philippine Long Distance Telephone Company, Globe Telecom Inc., Ayala Land Inc., BDO Unibank Inc., SM Prime Holdings Inc., GT Capital Holdings Inc., Universal Robina Corp., SM Investments Corp., International Container Terminal Services Inc., and Ayala Corp.
Overall trade volume stood at 879.664 million, valued at P7.617 billion. Decliners outnumbered advancers 119 to 54, while 37 issues closed unchanged.