Local shares joined the region-wide rally sparked by a last-hour surge in Chinese stocks yesterday.
The benchmark Straits Times Index (STI) climbed 32.91 points, or 1.15 per cent, to 2,885.32, led by the three local banks.
Investors were spurred into action after Shanghai shares posted gains for the first time in five trading days, rising 2.92 per cent, amid speculation that government funds had intervened to stabilise the market. Shenzhen stocks surged 3.83 per cent while Hong Kong jumped 3.28 per cent.
Japan missed out, with the Tokyo market losing 2.43 per cent after a report confirmed that the economy contracted in the second quarter.
"Trading is very volatile as the volume is extremely thin," Mr Castor Pang, head of research at Core-Pacific Yamichi Hong Kong, told Bloomberg. "State funds may be focusing the purchase on some large companies, including financials, and helping with a rebound in the broader market."
The rally in mainland Chinese stocks came even as data showed a steep slide in the country's imports for last month, while exports fell less than expected.
"This reinforced the narrative of a slowing China," noted IG market strategist Bernard Aw.
The three local banks clocked the day's biggest gains, led by OCBC Bank, which rose 16 cents or 1.8 per cent to $8.99.
DBS Group advanced 26 cents or 1.5 per cent to $17.70, while United Overseas Bank added 15 cents or 0.8 per cent to $19.30.
The index was also propped up by Singapore Airlines, which added 32 cents or 3.2 per cent to $10.17, and Singapore Exchange, which rose 21 cents or 2.9 per cent to $7.41.
Agri-business group Olam International remained under the weight of the commodities selldown, coupled with news that it will be dropped from the STI on Sept 21. It slid for the fifth consecutive day, down half a cent or 0.3 per cent to $1.955.
Other laggards included palm-oil giant Wilmar International, which dropped three cents or 1.1 per cent to $2.60, and telco Singtel, which was down two cents or 0.5 per cent at $3.65.
The most active stock was oilfield services group Ezra Holdings, with about 89.97 million shares traded.
The stock closed 0.2 cents or 1.6 per cent up at 13.1 cents, likely buoyed by news on Monday that its subsea services division Emas AMC has finalised a contract with mining giant BHP Billiton for a project off Trinidad and Tobago.
Overall trading on the bourse totalled $1.06 billion, with 1.19 billion shares changing hands.
Wall Street was closed on Monday for the Labour Day holiday.