Local shares started the week on a positive note, thanks to tailwinds from last Friday's Wall Street gains, China's central bank's rate reform and optimism over trade tensions.
The improved mood lifted the Straits Times Index (STI) 13.42 points, or 0.43 per cent, to 3,128.45 yesterday.
Elsewhere, shares in Australia, China, Hong Kong, Japan and South Korea posted gains, but Malaysia closed lower. Hong Kong's Hang Seng posted its best session in two months, advancing 2.2 per cent.
The People's Bank of China last Saturday revealed changes to the way the loan prime rate will be set. The move will lower borrowing costs for Chinese firms, and in so doing, boost the slowing economy.
VM Markets managing partner Stephen Innes noted: "While not quite the policy bazooka the market so desperately needs, it should provide a much-needed boost."
White House chief economic adviser Larry Kudlow said on Sunday that recent talks between United States and Chinese trade negotiators were positive.
He also eased worries that the US is heading towards a recession, and suggested that Washington may recycle receipts collected from Chinese tariffs as income tax cuts.
Oanda Asia Pacific senior market analyst Jeffrey Halley noted that the potential of proceeds from duties is "an elegant solution to reducing the pain of tariffs on the American consumer of China".
Trading volume here clocked in at 1.38 billion shares worth $1.04 billion, with gainers trumping losers 252 to 161.
Yangzijiang Shipbuilding was the STI's most active for the third straight session, up 7 per cent at one point before settling at $1.01, a 2 per cent gain, with 107.9 million shares traded.
Last week, retail investors were net buyers while institutionals sold off. A trader noted: "Those who picked up the counter on Thursday and flipped them on Monday already made decent gains."
The banks rose. DBS edged up 0.2 per cent to $24.75, OCBC Bank added 0.8 per cent to $10.71, and United Overseas Bank put on 0.4 per cent to $25.15.
Real estate investment trusts (Reits) were mostly higher, with Keppel DC Reit up 4.1 per cent to $1.78, and Mapletree North Asia Commercial Trust ahead 2.3 per cent to $1.36.
Among pennies, oil services player Rex International rose 14.7 per cent to 7.8 cents after its management said it had a war chest of US$70.8 million (S$98 million) in cash and cash equivalents as of June 30.