Local investors took heart from Wall Street's gains overnight on better employment and manufacturing data and drove the market higher yesterday.
The optimistic theme left the Straits Times Index (STI) up 6.81 points, or 0.25 per cent, to 2,707.20.
Losers outpaced gainers 249 to 212, with 1.64 billion shares worth $2.19 billion changing hands.
Oanda senior market analyst Jeffrey Halley said: "The overnight price action on Wall Street was very much a rerun of the day before.
"The momentum in global recovery trade remains undiminished, with equities carving out fresh gains globally and the rotation out of the US dollar continuing apace."
Another sign of the optimism on trading floors came with the Nasdaq climbing to within spitting distance of its all-time high yesterday, while the S&P is less than 10 per cent short of its own record.
ST Engineering, which rose 2.4 per cent to $3.49, was the best performer among STI constituents.
ComfortDelGro reversed Wednesday's gains and emerged as the worst performer for the day, falling 2.5 per cent to $1.57. It was the most actively traded stock, with 58 million shares changing hands.
The STI laggards also included three from the CapLand stable: CapitaLand Mall Trust fell 2.3 per cent, CapitaLand was down 1.9 per cent, while CapitaLand Commercial Trust dipped 1.7 per cent.
The STI's performance was in line with regional bourses, but investors are wary ahead of a European Central Bank meeting and upcoming US non-farm payroll figures, said AxiCorp chief global markets strategist Stephen Innes.
"But, in general, investors continue to cling to optimism for a speedy recovery from the pandemic and on anticipation of more stimulus from the EU," he added.
Regional markets mostly enjoyed rises yesterday, with Hong Kong up 0.17 per cent, its fourth day of gains as the easing of lockdowns worldwide trumps concerns about China-US tensions. China's Shanghai Composite Index dipped 0.14 per cent, but shares on the second exchange in Shenzhen rose 0.28 per cent.
Japan rose 0.36 per cent and South Korea ended 0.19 per cent up. Australia gained 0.8 per cent on the back of a A$680 million (S$657 million) package for residents to build or renovate their homes - the fourth stimulus since the pandemic began.
"Buying sentiment is supported by expectations of continued economic measures taken by many countries," said broker Toshikazu Horiuchi at IwaiCosmo Securities.
• Additional reporting by Agence France-Presse
