US President Donald Tump confirmed in a new year's eve tweet that he would sign a phase-one trade deal with China this month, and would later travel to Beijing to negotiate a broader deal.
Chinese equities jumped on the news, leading the Shanghai Composite Index 1.2% higher at midday.
On the local stock exchange, the index remained below the psychologically important resistance level, but was 7.07 points higher at 1,595.83 at midday.
It was earlier reported that Malaysia's December manufacturing purchasing managers' index had risen to 50.2, its highest since September 2018.
The positive performance is a welcome rebound after the market had experienced a rout of over 26 points on Tuesday, the final trading day of 2019, as investors cashed in on the year-end rally.
Trading volume for the morning session was also seen improving over the previous week, rising to 1.78 billion shares valued at RM851.91mil.
There were 462 gainers, 298 decliners and 352 counters unchanged.
Among the best-performing blue chips, Petronas Chemicals was up 10 sen to RM7.45, Public bank rose 12 swen to RM19.56 and CIMB climbed five sen to RM5.20.
Plantation plays were also seen rising as demand for CPO was set to improve on India's reduction in import duties. KL Kepong gained 42 sen to RM25.22 while Sime Darby Plantation rose three sen to R<5.48 and IOI added two sen to RM4.63.
Glove makers were a rare sore spot on the market as Hartalega shed 14 sen to RM5.34 and Top Glove lost three sen to RM4.67.
Of actives, Vivocom gained one sen to 2.5 sen, Bumi Armada rose 1.5 sen to 54.5 sen and TDM added 0.5 sen to 42.5 sen.
Oil markets were also on a stronger footing on optimism over demand growth as the signing of a US-China trade agreement creeps nearer and as turmoil brews in the Middle East.
Protestors stormed the US Embassy in Baghdad on Jan 1, prompting the White House to deploy troops.
US crude was up 18 cents to US$61.24 a barrel and Brent crude added 22 cents to US$66.22 a barrel.
In currencies, the shift to optimism over global growth continued to lift the ringgit vs the greenback. The local currency gained 0.1% against the US dollar to 4.0850, 0.2% against the Singapore dollar to 3.0333 and 0.4% against the pound sterling to 5.3971.
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