Tentative steps by China and the United States to de-escalate their bitter trade dispute sent a jolt of optimism across the region yesterday.
The rally was triggered by Beijing's response on Wednesday to demands by Washington for trade reform as informal talks resumed ahead of a leaders' meeting.
That spurred investors to send Hong Kong and Shanghai equities higher, driven in part by upbeat earnings from Internet giant Tencent.
The Hang Seng ended 1.8 per cent ahead while China's benchmark Shanghai Composite index added 1.4 per cent. Tencent rose 6 per cent on earnings that beat forecasts.
However, rising uncertainty sparked by the resignation of Brexit Secretary Dominic Rabb in Britain hit sterling and European equities in general, noted CMC Markets analyst Margaret Yang.
"Concerns about the UK's political future are likely to exert negative influence on market sentiment," she added.
South Korea's Kospi closed 1 per cent higher, boosted by news that US President Donald Trump will be meeting North Korean leader Kim Jong Un again next year.
The S&P/ASX200 in Australia closed nearly flat as the market took in the somewhat-good news about China-US ties. Indonesian equities were up 1.7 per cent and the Malaysian index rose 0.34 per cent.
The key Straits Times Index reversed a string of losses this week to finish 0.4 per cent or 11.34 points higher at 3,054.53. It erased early losses at the opening when it slipped 0.09 per cent. Gainers outnumbered losers for the first time this week, by 222 to 170, on turnover of 1.91 billion shares worth $1.06 billion.
The most active was Genting Singapore with 43 million shares changing hands as it rose 2.7 per cent to 95 cents.
UOB was the only local bank to finish in the black, up 0.46 per cent to $24.21. OCBC Bank shed 0.72 per cent to $11.06, and DBS ended 0.22 per cent lower at $23.15.
CapitaLand added 1.3 per cent to $3.12. RHB and DBS both kept "buy" calls on the firm's growing earnings and diversified assets.
Entertainment firm mm2 Asia sank 4.05 per cent to 35.5 cents after posting a 17.7 per cent drop in second-quarter earnings on higher finance expenses.
Noble Group ended 5.68 per cent lower at 8.3 cents after announcing the schemes of arrangement for its debt revamp had won sanction from English and Bermudan courts.
Singapore Airlines shed 0.956 per cent to $9.32 on news that it is looking to buy a stake in Indian carrier Jet Airways.