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Local shares brushed aside swine flu fears to hit their highest levels in more than three months, buoyed by hopes that the global economy might have put the worst of its troubles behind it.
The benchmark Straits Times Index (STI) gained 70.71 points, or 3.82 per cent, to 1,920.28 - its highest close since Jan 5 and its first above the key 1,900 support level in over two weeks.
'Traders are looking beyond the contraction in the US economy and asking if there's anything worthwhile picking up,' said remisier Thomas Lee.
Confidence was renewed following a brief statement from the United States Federal Reserve after its policy meeting, in which it noted the 'economic outlook has improved modestly since the March meeting'. The central bank kept interest rates at between zero and 0.25 per cent.
The STI has gained 32 per cent since reaching a six-year low of 1,456.95 points on March 9.
Despite doubts over its sustainability, the STI's rally is now into its seventh week - the longest upswing seen since the sub-prime mortgage crisis erupted in August 2007.
Renewed interest among retail investors can be discerned in the overall market volume, which surged to 2.01 billion shares worth $1.74 billion yesterday - crossing the two billion-share mark for the first time in a fortnight.
Elsewhere, Hong Kong's Hang Seng rose 3.77 per cent, while Tokyo's Nikkei 225 index gained 3.94 per cent as it played catch-up after Wednesday's public holiday. The big gainer was Taiwan as the Taiex surged 6.74 per cent on hopes of improved ties with China.
Like the US banks that led the charge on Wall Street, Singapore banks were among the top gainers on the STI.
DBS Group Holdings and OCBC Bank jumped 40 cents each, to $9.50 and $5.88, respectively, while United Overseas Bank surged 50 cents to $11.50.
The improved market sentiment also lifted property counters, as hopes grew that the embattled residential market might be turning the corner.
City Developments leapt 66 cents, or 11.3 per cent, to $6.48, while CapitaLand jumped 20 cents, or 7.8 per cent, to $2.76.
The stocks of smaller developers benefited as well. Wing Tai Holdings gained 6.5 cents to 88 cents, while Allgreen Properties rose four cents to 56 cents and Keppel Land was up five cents at $1.72.
However, on the broader market, Sino-Environment plunged 2.5 cents, or 22.7 per cent, to 8.5 cents on a hefty volume of 138.8 million shares. The counter was the most actively traded in volume terms.
It had just resumed trading after a three-day halt. The firm had disclosed that chairman Sun Jiangrong lost his shareholding control over Sino-Environment after his stake was cut from 31.23 per cent to 6.23 per cent.
Sino-Environment also warned that its ability to operate as a going concern was in doubt as bondholders might demand repayment of a $149 million loan from the firm because of Mr Sun's loss of shareholding control.
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