There was enough optimism around yesterday to allow local shares to register successive sessions of gains for the first time in three weeks.
Battered investors were buoyed by United States lawmakers finally agreeing to a stimulus package worth as much as US$2 trillion (S$2.9 trillion). While the news gave bearish equity markets a much-needed boost, market activity suggested investors were already expecting the decision to be made.
The Straits Times Index (STI) opened 3.5 per cent higher and rose further in the afternoon after news reports confirmed the White House and US Senate had reached a deal.
The STI finished 143.42 points, or 6.1 per cent, higher at 2,505.47. Trading volume was 1.87 billion shares worth $2.29 billion, with gainers beating losers 385 to 122.
Elsewhere, equity benchmarks in Australia, China, Hong Kong, Japan, Malaysia, South Korea and Taiwan continued to record strong gains.
Markets may be in a cheerful mood, but strategists remain cautious given that the total number of Covid-19 cases continues to rise.
Mr Vishnu Varathan from Mizuho Bank felt the enthusiasm was at "odds with the rapid proliferation of lockdown globally, which reflects elevated healthcare risks".
Likewise, AxiCorp global chief markets strategist Stephen Innes noted: "For risk sentiment to turn back on bright, investors need conclusive evidence of coronavirus infection curves flattening, bringing an end to lockdowns."
With full details of the US fiscal package yet to be revealed, "volatility is likely to remain on overdrive and it will be difficult to imagine a scenario that will see global equities further advance throughout the week", added Oanda senior market analyst Edward Moya.
In the local market, the banks built on Tuesday's rally. DBS leapt 6.7 per cent to $19.42, United Overseas Bank added 6.5 per cent to $20.02 and OCBC Bank jumped 7 per cent to $8.89.
The STI's travel-and leisure-related counters caught some respite ahead of another package with measures to help individuals, businesses and households cope with the coronavirus outbreak.
Singapore Airlines surged 10.4 per cent to $6.50, ground handler Sats added 13.2 per cent to $3.09, while casino firm Genting Singapore gained 9.7 per cent to 62 cents.
Real estate investment trusts (Reits) continued to make big strides after being heavily sold off last week. The iEdge S-Reit Index, which tracks all Singapore-listed property trusts, closed 9.1 per cent higher at 1,117.38. The index has risen 17.9 per cent in the past two sessions.
