The key Philippine stock index <.PSI> closed 1.9 percent lower, with losses concentrated in the real estate sector as SM Prime Holdings Inc, the country's biggest property firm by market capitalisation, slumped on a report that one of its reclamation projects may be shelved.

The secretary of the Department of Interior and Local Government said the reclamation projects in the Manila Bay should be scrapped for the area's rehabilitation, GMA Network reported.

In 2013, the group signed a 54.5 billion pesos ($1.04 billion) joint venture agreement with the Pasay City government to reclaim 300 hectares of land in the Manila Bay area.

The project comprised a majority of the group's expected reclamation and is the reason behind the stock's plunge, said Charles William Ang, an analyst with COL Financial Inc.

Shares of SM Prime fell 6.9 percent to a two-week closing low in heavy trade. Over 45.5 million shares changed hands, 3.3 times the 30-day average.

Ayala Corp, another index heavyweight, sank 5.3 percent to a two-week closing low after Mitsubishi sold 13 million shares of the company at a 7.3 percent discount to Tuesday's close.

"I think the drop in the index is because of them. So, it is more company-specific than anything in the economy," Charles added.

Meanwhile, China's central bank injected a record $83 billion into the country's financial system, seeking to avoid a cash crunch that would put further pressure on the weakening economy.

With rising uncertainty over the ailing economy, most stock markets in the region remained rangebound as investors adopted a wait-and-watch approach.

Malaysian shares <.KLSE> fell 0.4 percent, weighed down by financial and utility stocks. Public Bank Bhd shed 1.1 percent, while Tenaga Nasional Bhd dropped 1.9 percent.

Singapore shares <.STI> closed higher for an eighth session in nine, helped by financial and consumer non-cyclical stocks.

Thai Beverage Pcl gained 2.1 percent, while DBS Group Holdings Ltd firmed 0.6 percent.

(Reporting by Shreya Mariam Job in Bengaluru; Editing by Subhranshu Sahu)

By Shreya Mariam Job