Asian stocks crashed deeper yesterday in a rout reminiscent of the September 11, 2001 bloodbath after already jittery investors were further unnerved by the drop in Wall Street.

The Philippine Stock Exchange index lost 6.1 percent, the second highest loss after Jakarta. Singapore dived 5 percent.

Traders were alternately using "bloodbath, crash, meltdown" as panicked investors bolted.

In the Philippines, the sell-down wiped out P150 billion market capital. The two-day rout erased a total of P260 billion.

"It’s horrible. People can’t believe this is happening. A triple-digit fall for two days in a row smacks of a mini crash," said Najeeb Jarhom, research head at Fraser Securities in Singapore.

Investors were falling over themselves in the rush to be ahead of "any more mines that will explode in the world financial market.

Yesterday’s fallout was set off by worries that Countrywide Financial, the largest US mortgage lender, could face bankruptcy if liquidity worsens after a Merrill Lynch analyst flagged that possibility.

"The subprime issue will probably take months to play out so trading is going to be very nervous for a while," said Eric Betts, equities strategist at Nomura Australia.

"Anyone who has a financial interest, like a bank or a fund, may have some unexploded mines waiting to go off, so people are bailing out ahead of time."

Other Southeast Asian markets skidded to multi-month lows as well. Jakarta stocks fell 6.3 percent to a four-month low, Malaysian shares dropped 3.69 percent to a near five-month low.

Philippine stocks plunged 6.01 percent — their biggest one-day drop since Feb. 28 — to a seven-month low, Thai shares lost 3.91 percent, their biggest one-day drop in nearly eight months, and Vietnam’s key index fell 1.65 percent.

Financial and blue chip stocks with large foreign holdings — which have led losses in regional markets in the past three weeks — bore the brunt of Thursday’s sell-off.

In Manila, the Bank of the Philippine Islands, the country’s second-largest lender, dropped 7.6 percent. Philippine Long Distance Telephone Co., the largest telecom, dropped 7.9 percent.

Philippine Stock Exchange index (PSEi) closed at 2,942.31, the level set last December.

The market has been down 19.6 percent since the start of its strong sell-off on July 26.

Analysts said investors are panicking.

Market turnover reached 5.55 billion shares to P4.9 billion.

PhilEquity Fund, Inc. research head Jerome Gonzales said the market is now in a panic stage given the prolonged effect of the US market decline

"We are on a panic stage now. There could be a bounce, but since the concern is brought by the US problem, we don’t know how long the correction will last " said Gonzales.

The PSE said that the top five stocks affected by the sell down were Metrobank, Ayala Corp., Ayala Land, Inc., Bank of the Philipine Island, and Atlas Consolidated Mining Corp.

Metrobank share prices declined 12.9 percent since the July sell-off; Ayala Corp. was down 21.6 percent; ALI was down 16.4 percent; BPI lost 18 percent; and Atlas shed 26.9 percent.

Gonzales however kept a positive outlook on the market’s long term prospects, stressing that the prolonged correction had brought many stocks to a very cheap level.

"At these prices, there are already stocks that have gained value. As a fund, we are looking at a year time frame and there are stocks that are now attractive," he said.

Unicapital Securities, Inc. research head Ron Rodrigo meanwhile shares the optimism of Gonzales recalling the market’s similar experience in 1994.

"Going back to history, it already happened during 1994. The market for the first time reached 3,333.15 at the start of the year and then three months after corrected to 2,503.07 a 24.9 percent drop. It is just a similar scenario, but different factors," said Rodrigo.

Rodrigo noted after that the market was able to recover and post higher before it start its ascend in 1997.

Philippine Long Distance Telephone CO. (PLDT) shed P195 to P2,465.

SM Prime Holdings, Inc. lost P0.50 to P9.50.

Megaworld Corp. shed P0.25 to P2.85.

Ayala Corp. was down P15 to P417.50.

Units ALI was down P0.50 to P13.75, and BPI shed P4.50 to P54.50.

SM Investments Corp. shed P12.50 to P320. (with reports from Reuters)

Metrobank was down P3.50 to P49.50.

Atlas shed P1.25 to P11.50.

Aboitiz Power Corp. lost P0.45 to P3.90.

Benpress Holdings Corp. was down P0.50 to 4.35.

San Miguel Corp. A dhares were down PP4 to P62, B shares were down P3.50 to P65.