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Singapore shares soar 1.5% as Trump-Xi meeting boosts trade hopes

A BETTER-THAN-EXPECTED outcome to the G-20 meeting between the US and China pushed risk-on sentiment - in the periphery in recent weeks - back to the fore.

The bullish spirit of the day saw the Straits Times Index (STI) streak ahead to start the third quarter, finishing 50.65 points or 1.5 per cent higher at 3,372.26.

Regional markets Australia, China, Japan, Malaysia and South Korea all closed comfortably higher. Hong Kong remained closed for the observance of the Special Administrative Region Establishment Day, with the buoyant mood putting a cap on the effects of decreased liquidity in Asia.

"After spending the better part of two months in trade war purgatory and with G-20 done and dusted, risk markets have responded to Saturday's events in a reveller tone," Vanguard Markets managing partner Stephen Innes observed.

Expectations for Saturday's meeting in Osaka were for a truce. Trade talks restarted and the US did not proceed with tariffs on US$300 billion of Chinese exports. But investors got a little more than that, with Washington's concession that US companies can resume business with Huawei Technologies, reversing an earlier ban in May by the US Commerce Department. Observers see this as a near-term positive.

In Singapore, trading volume clocked in at 1.09 billion securities, 91 per cent of the daily average in the first five months of 2019. Total turnover came to S$1.19 billion, 14 per cent over the January-to-May daily average.

Across the market, advancers trumped decliners 295 to 129. Just two of the STI's 30 components finished in the red.

The local banks climbed. DBS Group Holdings jumped S$0.64 or 2.5 per cent at S$26.60, OCBC Bank was S$0.19 or 1.7 per cent higher at S$11.59 while United Overseas Bank finished at S$26.61, up S$0.48 or 1.8 per cent.

With Huawei back in business with its US partners, unsurprisingly, the cyclically-sensitive manufacturing and semiconductor stocks outperformed the market. Venture Corporation shares gained S$0.71 or 4.4 per cent to S$17.00, Hi-P International advanced S$0.08 or 5.8 per cent to S$1.47 and AEM Holdings finished S$0.04 or 4 per cent up at S$1.04.

Among pennies, Vibrant Group shares surged 2.8 Singapore cents or 20 per cent to 17.1 cents on 47.2 million shares after completing the disposal of a 51 per cent stake in Sabana Investment Partners, with the mainboard-listed company intending to use proceeds from the divestment to conduct a partial redemption of its S$66 million 7.5 per cent notes due in 2020.