The temporary truce struck between China and the United States over trade and Chinese tech giant Huawei ignited share markets across the region yesterday.
Investors had largely expected some sort of ceasefire on tariffs, but it was the change of tone on Huawei that allowed global stocks to start with a bang in the third quarter.
Phillip Securities trader Robin Ho said the market had already priced in the G-20 summit outcome: "The surprise was (US President Donald) Trump easing the selling ban on Huawei."
The buoyant mood after months of uncertainty propelled the Straits Times Index (STI) up by as much as 1.61 per cent just before the market close yesterday to sit just shy of a one-year high of 3,407.02 points on April 29. It eventually closed up 1.52 per cent at 3,372.26 points, ahead by nearly 10 per cent so far this year.
This makes it South-east Asia's second-best performer, after Bangkok.
Markets in Japan, Shanghai and Shenzhen all rallied more than 2 per cent, while Taiwan jumped just over 1.5 per cent. Hong Kong was closed yesterday for a holiday while fresh unrest gripped the city.
The game-changer was Mr Trump's concessions to Huawei, which will now be allowed to buy parts from US suppliers that do not affect America's national security.
The move fired up Singapore tech plays, with Venture Corp jumping 4.36 per cent to $17, Hi-P International gaining 5.76 per cent and AEM Holdings up 4.85 per cent.
Bank of Singapore head of investment strategy Eli Lee noted: "Given that the Huawei issue is the focal point of larger Sino-US tensions over technology and 5G dominance, this is a significant step in a positive direction, although it is not clear how far Trump will go."
The truce also lifted the three banks, with DBS gaining the most, up 2.47 per cent. Analysts downplayed the impact of Singapore issuing up to five digital bank licences.
Property counters also enjoyed a boost, with CapitaLand jumping 3.4 per cent on the completion of its $11 billion acquisition of Ascendas-Singbridge. "CapitaLand will have bigger weighting on the STI and MSCI Singapore after the merger, and more funds may start looking at the stock... That could have a positive spillover on smaller property stocks," KGI Securities investment analyst Joel Ng said.
Hong Fok rose 2.37 per cent to 86.5 cents, Bukit Sembawang gained 1.21 per cent to $5.84, and Far East Orchard jumped 1.68 per cent to $1.21.