Investors shrugged off the dismal purchasing managers' index reading on Monday to stage a small turnaround yesterday.
The Straits Times Index (STI) inched up 8.67 points, or 0.34 per cent, to 2,572.36 with 1.04 billion shares worth $969.45 million traded. Gainers outnumbered losers 282 to 155.
The positive outcome came as Wall Street had a late-session rally on Monday as governments relaxed lockdown measures while oil prices continued to perk up, although they remained at historic lows.
While there is a feeling among investors across the world that the worst could well be over in many countries, it remains to be seen if the uptick can be sustained.
DBS Equity Research has sounded a note of caution: "The circuit breaker extension that has affected the dividend payout date for some companies could mean a two-to four-week delay to 'sell in May and go away' this year."
The firm has lowered its STI year-end target to 2,850 from 3,350. It commented: "The current STI rally should be capped at 2,670 to 2,740 in the near term, with subsequent technical downside risk to 2,300 in the coming months."
The STI's top performer was DBS Group, which was trading cum dividend, ending at $19.70, up 0.7 per cent.
Both research houses UOB Kay Hian and Phillip Securities recommended a "buy" call on the stock.
Monday's top STI performer, Jardine Strategic Holdings, lost all its gains, sliding 3.2 per cent to US$21.21.
The most heavily traded stock was Yangzijiang Shipbuilding, which declined 1 per cent to 96 cents on a volume of 19.6 million.
The Japan, South Korea and China markets were closed for the holidays, while most Asian markets posted gains.
The Hang Seng Index was up 1.1 per cent after Hong Kong dialled down social distancing restrictions implemented to curb the spread of the coronavirus.
Australian shares closed higher, with the ASX 200 index up 1.6 per cent, while the Kuala Lumpur Composite Index gained 0.9 per cent.
Mr Michael McCarthy, chief market strategist at CMC Markets, warned against reading too much into the day's moves in Asia, with few meaningful leads for investors.
"While the rises are good to see, much of the region is still on holiday, and (Australian) volumes are down 10 per cent and that means this won't be too convincing for traders," he told Reuters.
