The blue chip Straits Times Index rose 109.39 points at 3,159.48, continuing a rebound from major losses during the first two days of the week when stock markets worldwide crumbled on US recession fears.

Volume was 2.03 billion shares worth 2.51 billion Singapore dollars. Rising issues led decliners 665 to 186 with 922 stocks unchanged.

'This probably isn't the bottom of the pond yet, as volatility and sentiment will continue to dictate the market in the next few months,' Terence Wong, an analyst with DMG & Partners Securities, said.

He said blue chips have become bruised 'blue-black' chips.

'Should confidence return to the market, these stocks will be the frontrunners leading the charge,' said Mr Wong.

The White House and US congressional leaders struck a deal Thursday on a quickly crafted stimulus plan of about 150 billion US dollars (S$213) aimed at heading off a recession in the world?s biggest economy.

The deal, announced just days after President George W. Bush called for an economic growth package, brings the House of Representatives on board and sets the stage for likely action.

Banking shares rallied, with DBS gaining 48 cents to 18.94 dollars, United Overseas Bank up 50 cents to 18.08 dollars and Oversea-Chinese Banking Corp rising 12 cents to 7.80 dollars.

City Developments led property gainers, rising 66 cents to 12.88 dollars. CapitaLand closed up 39 cents at 6.53 dollars, Keppel Land rose 41 cents to 6.65 dollars and Wing Tai climbed six cents to 2.30 dollars.

Among blue chips, Singapore Telecommunications rose seven cents to 3.76 dollars, Singapore Airlines was up 60 cents to 16.46 dollars and Neptune Orient Lines gained 29 cents to 3.48 dollars.

Bourse operator Singapore Exchange finished 78 cents higher at 10.88 dollars. -- AFP