SINGAPORE - Singapore shares closed up for a second straight day this week, pushing the benchmark Straits Times Index to its highest point in almost two years as banking stocks stayed hot.

The STI rose 12.99 points or 0.40 per cent to 3,249.97 on Tuesday, a level not reached since July 2015. Trading was also lively, as S$1.3 billion worth of shares were transacted across the whole market.

With the STI chalking up a 12.8 per cent gain since the start of the year, "the million dollar question now is whether the momentum can carry on," KGI Securities Singapore strategist Nicholas Teo told The Straits Times.

"At the moment there aren't any visible headwinds that can reverse the trend even though banking stocks are certain to tire out. When that happens, and because of a lack of headwinds, we might see market funds being rotated away into other laggards," he added.

The range-bound trading on Wall Street might be a preview of that scenario, with the Dow Jones Industrial Average closing up just 0.03 per cent overnight.

Still, the local sentiment remained positive at the moment, and half of the 30 STI component stocks rose yesterday.

OCBC was among the top gainers, up 16 cents or 1.55 per cent to S$10.46 with 13.9 million traded shares. DBS Group Holdings put on 20 cents or 0.99 per cent to S$20.50, and United Overseas Bank added 11 cents or 0.47 per cent to S$23.55.