Stocks across Asia charged higher yesterday as investors cheered unexpectedly upbeat Chinese trade data - a fresh sign that the world's No. 2 economy is stabilising.
Singapore was one of the region's best performers with the Straits Times Index (STI) recouping all its losses for the year. The STI surged 2.69 per cent to 2,890.41, and is now up 0.27 per cent so far this year.
Elsewhere in Asia, Hong Kong surged 3.2 per cent, Japan jumped 2.8 per cent, Thailand added 1.1 per cent, while Shanghai and Shenzhen each gained 1.4 per cent.
A key catalyst was data showing that China's exports returned to growth last month for the first time in nine months.
These leapt 11.5 per cent, the first rise since June last year and the largest percentage gain since February last year.
Sentiment improved even as oil prices eased a little from 2016 highs amid hopes that Saudi Arabia and other major producers would reach a deal to freeze production levels at a meeting this weekend.
This could be the first major concerted move to stabilise oil prices since the price rout began in late 2014.
The combination of a weaker greenback, higher commodity prices, low valuations and more proactive policymaking across Asia, especially in China and Indonesia, is bringing Asian equities back into favour, said Mr Herald van der Linde, HSBC's head of equity strategy for Asia-Pacific.
Another factor is increased risk appetite for stocks in the face of negative interest rates, he added.
Investors also appeared to shrug off a cut by the International Monetary Fund in its global growth forecast for this year.
For China, however, the fund upgraded its growth forecast by 0.2 percentage point to 6.5 per cent, as a downturn in manufacturing is offset by growth in its service sector.
Ms Jing Li, HSBC's greater China economist, said the latest export data showed "tentative" signs of stabilisation in both external and domestic mainland demand.
Shipments to both developed and developing markets were better than in previous months, with exports to Asean and the European Union improving the most.
That said, the recovery in exports is still very fragile in the light of the tepid growth outlook for China's major export markets such as the EU and the United States.
As such, the sustainability of this recovery remains questionable, said Ms Li.