The Straits Times Index (STI) has ended above the 3,000-point mark for the first time in more than a year, with Singapore now the best regional performer so far this year.
The local benchmark rose 24.48 points, or 0.82 per cent, to close at 3,006.02 yesterday.
Singapore equities, like many around the globe, have been riding high since Mr Donald Trump's shock election as United States president.
Singapore stocks started the year on an upbeat note on signs the economic slowdown may have reached a nadir. Economic growth estimates rose 9.1 per cent quarter on quarter in the fourth quarter, whereas they shrank 1.9 per cent in the third.
A pullback in the US dollar's strength against regional currencies helped boost equities. Singapore outperformed the rest of Asia in the first seven trading days, with a 4.35 per cent gain. Hong Kong was second, with a 3.38 per cent gain, and Thailand third, with a 1.89 per cent gain.
Blue-chip bank stocks have been rallying on a resurgence of interest from institutional investors, on expectations of the boost that accelerated interest rate hikes may give to lenders' bottom lines.
"The banking sector here is best positioned to take advantage of rising interest rates, among the emerging markets, because it is able to widen net interest margins, and isn't expected to suffer too much in terms of asset quality," said Citi investment strategist Ken Peng.
A revival of interest in mergers and acquisitions among property stocks including Global Logistic Properties (GLP), as well as the attractive valuations of developers CapitaLand, City Developments and UOL, also helped.
GLP said it is in preliminary talks with various parties on a possible sale of the firm. It has reportedly asked potential buyers for initial offers by early next month.
Even the battered oil and gas sector received some reprieve on a rebound in crude oil prices to above US$50 and optimism that the supply glut will abate after last month's landmark Opec deal to cut production.