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Singapore shares gain 0.4% as US, China inch towards trade deal

ASIAN markets ended higher on Tuesday, following a record-setting session for US equities as the US and China showed signs of nearing a trade war truce.

The "phase one" deal is expected to forestall tariffs scheduled for Dec 15, but according to the Financial Times, the Trump administration is considering dropping the tariffs imposed in September as well, to seal the deal with China.

Singapore's Straits Times Index gained 0.38 per cent or 12.23 points to 3,248.63. Japan soared 1.8 per cent to its highest in nearly 13 months, and South Korea gained 0.6 per cent to a six-month high. Markets in Australia, New Zealand, China, Hong Kong and Malaysia all ended higher.

"Global equities have enjoyed a double boost of late, with the ongoing US earnings season as well as optimism surrounding US-China trade talks helping stocks climb, although it remains to be seen whether such buying momentum can be sustained," wrote FXTM market analyst Han Tan in a Tuesday note.

"If the US does roll back existing tariffs, the positive spillover will extend beyond financial markets, as such a move would alleviate the downward pressures on global trade conditions as well."

Michael Metcalfe, global head of macro strategy at State Street Global Markets, noted that manufacturing sentiment indicates the trade war escalation has caused greater distress in the US than in China. He said: "If economic rationale was a key driver, the pressure to agree to a trade truce soon is growing. The only question now is when the economic rationale will coincide with the immediate political need."

Turnover on the Singapore bourse was about 1.37 billion securities worth S$1.2 billion, with gainers outnumbering losers 226 to 159.

Rex International led active counters for the third session in a row, adding 0.9 Singapore cent or 7.8 per cent to S$0.125 on a volume of 102 million shares.

Following at a distance was Yangzijiang Shipbuilding, which had 73.9 million shares traded and gained seven Singapore cents or 7.3 per cent to S$1.03.

Pacc Offshore Services Holdings (POSH) saw a spike of interest in its shares, following a voluntary conditional cash offer of S$0.215 per share announced by Quetzal Capital on Monday night. The offer is conditional on receiving valid acceptances of at least 90 per cent of outstanding shares at the close of the offer, and the offeror has already secured irrevocable undertakings representing 75.03 per cent of the total number of shares outstanding.

POSH shares jumped 8.3 Singapore cents or 65.35 per cent to S$0.21 on Tuesday, with 11.06 million shares changing hands.

Alpha Energy Holdings and Mercurius Capital Investment called for trading halts before market open, and neither had made official announcements as at market close. Sources told The Business Times on Tuesday afternoon that Alpha Energy's Mustang oilfield project in Alaska's North Slope has hit first oil production and sales to an oil major.

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