Local shares benefited from the Government's mega Covid-19 relief package unveiled last week.
The Straits Times Index (STI) gained 41.20 points to close at 2,528.76, finishing the week up 118.02 points, or 4.9 per cent, last Friday.
Almost every government in the world is taking unprecedented steps to soften an inevitable recession.
But with the US CBOE Volatility Index - a gauge of investor anxiety - still hovering at levels higher than during the 2008 financial crisis, many feel it is still too early to buy a bounce.
CGS-CIMB Securities chief investment strategist Lim Say Boon noted last week: "The bubbles in equities, bonds and fiscal/monetary policy were awaiting catalysts for mean reversion.
"They found it in Covid-19. The markets will at some stage look past the panic and fear, towards anti-viral treatments and vaccines. But not before completion of a more painful mean reversion."
He noted that research by Goldman Sachs found that US bear markets since the 1880s averaged declines of 29 per cent when they were event-driven, 31 per cent if they were cyclical and 57 per cent when they were structural.
"The problem with this assumption is that it ignores cyclical and structural vulnerabilities that were already evident before the Covid-19 event," Mr Lim said.
Meanwhile, others are placing their bets on China, where a gradual recovery is expected ahead of the rest of the world.
UBS Global Wealth Management regional chief investment officer Kelvin Tay said: "China continues its encouraging recovery in economic activity. Coal consumption in power plants is back to 90 per cent of that in recent years, property sales in big cities are now at 60 per cent of normal levels and the daily outflows from labour-exporting provinces are back to the previous year's levels, indicating a further pickup in work resumption.
"Our preference is for the online gaming, retail and food delivery stocks in China, where the normalisation of economic activity has gathered momentum."
