The lights were flashing green as Asian equity markets had a relief rally yesterday after sell-offs on Monday when mainland Chinese markets returned from an extended Chinese New Year break.
While the coronavirus remains the key concern, investors appeared buoyed by the recent slower rate of increases in new cases.
Sentiment also lifted after China's central bank injected over US$230 billion (S$315 billion) into its financial markets this week and strong January manufacturing data landed from the United States.
The Straits Times Index ended at 3,156.57, up 40.26 points or 1.29 per cent. Elsewhere, Australia, China, Japan, Hong Kong, Malaysia, South Korea and Taiwan posted gains. China's Shanghai Composite, which lost more than 7 per cent on Monday, rose 1.3 per cent.
Trading volume here hit 1.77 billion shares worth $1.34 billion with 296 gainers to 144 losers.
With virus worries still at the top of the agenda for investors and traders alike, listings in tourism-and travel-related industries continued to take a hit.
UOB Kay Hian analyst K. Ajith lowered his call on the Singapore aviation sector to "underweight" as contagion fears have led to flight cancellations and capacity cuts.
Sats, which receives about 86 per cent of its revenue from aviation, fell 0.9 per cent to $4.45. The ground handler was downgraded to "hold" due to near-term earnings risks with its exposure to the travel industry.
Singapore Airlines, which added 0.7 per cent to $8.55, could swing to a loss in the fourth quarter and cut full-year earnings by 29 per cent to $483 million, Mr Ajith added.
Hospitality plays in the property sector are also facing headwinds from the virus outbreak, but DBS Group Research analysts said investors should wait for a better entry point to buy on the dip.
DBS said unit prices among such real estate investment trusts (Reits) under its coverage will have to fall between 5 per cent and 15 per cent before they turn attractive.
Much like in the past fortnight, Medtecs International continued to be among the Singapore bourse's most active counters. The medical consumables manufacturer fell 4.8 per cent to 12 cents with 105.1 million shares traded.
AxiCorp chief market strategist Stephen Innes said: "The market is still, for the most part, in the fear mode, but as traders consume more economic data, the hit to the real economy should become more apparent. Then, the market will be steered by data, not the herd mentality."
