Bulls And Bears

Rising China-India border tensions hit sentiment

Singapore market languishes, with STI dipping amid mixed Asian trading

Local shares languished as investors turned a wary eye to the border tensions between India and China that have escalated amid persistent Sino-United States rivalry.

Those tensions were ratcheted up again on Wednesday when India stepped up the pressure on Chinese tech firms by banning another 118 mobile applications, including Tencent Holdings' popular video game PUBG and Xiaomi's ShareSave.

The ban follows an announcement by a senior Indian official that troops were deployed after what New Delhi described as an attempted Chinese incursion along a disputed Himalayan border.

Meanwhile, the US said it would now require senior Chinese diplomats to get State Department approval before visiting US university campuses or holding cultural events with more than 50 people outside mission grounds.

The unsettling developments gave investors with little to go on here, which left the Straits Times Index down 8.15 points, or 0.32 per cent, at 2,531.79.

There were 1.9 billion shares worth $1.1 billion traded, with 163 gainers to 288 losers.

Parkway Life (PLife) Reit bucked the broad declines across the S-Reits, closing up 0.8 per cent at $3.89.

The Reit was underpinned by news that it will join the FTSE Epra Nareit Global Developed Index on Sept 21.

The index is reviewed every quarter. PLife Reit has been among the 70 most actively traded stocks this year, attracting $2.5 million in net institutional inflows. It is also among the top five performing S-Reits, with a 21 per cent total return.

FTSE Russell said yesterday that there will be no changes to the constituents of the STI, following its quarterly review.

Regional markets were mixed.

Hong Kong dipped 0.45 per cent as a weak US jobs report and geopolitical tensions overshadowed vaccine hopes.

Similarly, China's Shanghai Composite dropped 0.58 per cent, while Shenzhen retreated 0.84 per cent.

South Korea closed 1.33 per cent higher, driven by local chip stocks, and Japan ended up 0.94 per cent. Australian shares rose 0.8 per cent.

This comes after Wall Street's S&P 500 and Nasdaq clocked up yet more record highs overnight and the Dow jumped an impressive 1.6 per cent.

Analysts pointed out that the gains were beginning to broaden out from the technology giants which have helped power much of the past months' surge.

"Quite why the rally has broadened out is frankly anyone's guess, though both the 'rates lower for longer' and 'vaccine round the corner' pretexts received some (small) succour overnight," said National Australia Bank's Mr Ray Attrill.

Additional information from Agence France-Presse

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A version of this article appeared in the print edition of The Straits Times on September 04, 2020, with the headline Rising China-India border tensions hit sentiment. Subscribe