The Straits Times Index (STI) ended yesterday up 40.11 points, or 1.6 per cent, at 2,550.86 points.
The STI's performance was in line with that of Asian markets, which rebounded after United States President Donald Trump avoided pulling out of the US-China phase one trade agreement signed in January.
Said IG market strategist Pan Jingyi: "The highly anticipated Friday announcement from President Donald Trump yielded less aggravating-than-expected treatments, providing temporary relief for Asia."
And Mr Trump's stopping short of calling for an immediate end to the special treatment of Hong Kong came as a relief to many investors.
Hong Kong's Hang Seng Index jumped 3.3 per cent while the Shanghai Composite Index gained 2.2 per cent, helped by data that showed China's factory activity unexpectedly returned to growth last month, though export orders continued to shrink.
South Korea's Kospi gained 1.8 per cent despite data showing that the country's exports tumbled last month for a third straight month.
Indonesia's Jakarta Composite Index was up 0.8 per cent, and the FTSE Bursa Malaysia KLCI Index rose 1.2 per cent.
Tokyo's Nikkei 225 Index was up 0.8 per cent on expectations that more businesses would reopen as the Japanese capital lifts restrictions on retail stores and other facilities.
Among the STI constituents, the best performer was property player Hongkong Land, which gained 8.3 per cent to close at US$4.07.
Sembcorp Industries (SCI) also emerged among the top 10 best performing stocks of the day, gaining 3.7 per cent to $1.41.
DBS Group Research has upgraded SCI to "buy" from "hold" with an unchanged target price of $1.70. The sell-off in SCI shares was most likely due to the company's recent removal from the MSCI Index, pushing SCI's valuation to an "unwarranted low", said the research team.
At the bottom of the STI's table was Mapletree Logistics Trust, with a decline of 2 per cent to $2.01.
Across the market, advancers outnumbered decliners 322 to 161 for the day, with 2.18 billion shares worth $2.11 billion changing hands.
The most heavily traded stock was ComfortDelGro, which dipped 0.7 per cent to $1.43.
DBS Group Research has upgraded ComfortDelGro to "buy" with a raised target price of $1.68 from $1.50 previously, on the back of the opportunity to accumulate the stock on weakness from the transport giant's removal from the MSCI Singapore index last Friday.
