A more buoyant August reading for China's manufacturing sector lifted the mood yesterday but worries over US President Donald Trump's latest trade threat meant a mixed start to the week for equities.
Singapore's Straits Times Index (STI) fell 0.3 per cent at the opening and hovered in that region for most of the session before closing 5.64 points or 0.2 per cent lower at 3,119.99, but was up 0.4 per cent for what has been a turbulent September. Elsewhere, Hong Kong and South Korea notched gains but Australia, China and Japan fell and Malaysia closed flat.
With Mr Trump's latest threat in mind, the Shanghai Composite Index was, unsurprisingly, the worst performer among the region's key benchmarks, down 0.9 per cent.
China's manufacturing purchasing managers' index beat expectations, while its non-manufacturing equivalent continued on its expansionary path. UOB economist Ho Woei Chen said the data suggests the Chinese economy is more resilient than expected and injects some optimism on its outlook. But she added that "against the backdrop of United States-China trade tensions and a global growth slowdown, we continue to see risks".
With high-level talks between the US and China expected to commence on Oct 11, reports suggesting the US administration has considered delisting Chinese firms on US exchanges and limiting investment by US funds in China-based securities will remain a concern during China's Golden Week holiday.
"As a whole, the markets opened up much calmer than I imagined when I first read... that the US is weighing limits on US portfolio funds. Somehow, I think it's way too early to put the enormity of this possible trade war escalation in the rear-view mirror," said AxiTrader Asia-Pacific market strategist Stephen Innes.
Trading volume here clocked in at 934.64 million securities worth $818.34 million, with losers beating gainers 239 to 160. Singtel was the STI's most active, losing 0.6 per cent to $3.10 on trade of 27.8 million shares. The banks were mixed. OCBC Bank gained 0.4 per cent to $10.86, and DBS Bank added 0.4 per cent to $25.00 but UOB lost 0.1 per cent to $25.66. Among real estate investment trusts (Reits), Mapletree Commercial Trust (MCT), which was added to the STI on Sept 23, fell 2.1 per cent to $2.29.
In its first week as a benchmark constituent, MCT was among the Singapore Exchange's top counters for institutional investor inflows. The Reit also acquired a business park in Pasir Panjang from its sponsor for $1.55 billion. The deal, which increases the Reit's assets under management by 21 per cent, was widely anticipated.
