• Singtel the top gainer, rising 2.2 per cent to $2.28
• Malaysia bucks trend in Asia, with KLCI falling 0.2 per cent
• US central bank holds off on tapering monetary policy
The steady-as-she-goes stance taken by the United States Federal Reserve meeting overnight gave markets across the region all the excuse they needed to head north.
The Fed's decision to hold off on tapering its monetary policy support was eagerly embraced by local investors, who sent the Straits Times Index (STI) up 1.2 per cent, or 38.86 points, to close at 3,180.61.
Gainers outstripped losers 303 to 212 with 1.51 billion shares worth $1.51 billion changing hands.
Local bank stocks were among the gainers after the Monetary Authority of Singapore lifted dividend restrictions. Shares of DBS Bank, OCBC Bank and UOB rose between 1.4 and 2.1 per cent and were also the most actively traded counters by value for the day.
Jefferies equity analyst Krishna Guha said: "We expected caps to be lifted in phases, so a complete reinstatement is a positive surprise."
He expects all three banks to raise their dividend to at least pre-pandemic levels, barring any large-scale factors intruding.
Telco Singtel was the top STI gainer for the day. It rose 2.2 per cent to $2.28, while Sembcorp Industries finished at the bottom of the performance table, falling 0.9 per cent to $2.10.
Shares in Hong Kong and Shanghai led gains following heavy losses earlier this week.
IG market strategist Yeap Jun Rong said some optimism may have arisen following a meeting between China's securities regulator and major investment banks.
"This may suggest the regulators are starting to be concerned about the market impact on its domestic firms and may provide some reprieve for investors," he said.
The Hang Seng Index jumped 3.3 per cent, while the Shanghai Composite Index rose 1.5 per cent.
The Kospi in South Korea gained 0.2 per cent and the ASX 200 in Australia rose 0.5 per cent on the back of mining gains.
Shares in Malaysia bucked the trend as the KLCI fell 0.2 per cent.