Local investors managed to push shares up a notch yesterday despite disappointing factory data from China and warning signals from the United States bond market.
The Straits Times Index (STI) added 9.38 points, or 0.3 per cent, to finish at 3,155.71 after Monday's flat result.
Elsewhere, bourses in Australia, China and Malaysia ended lower, Japan and South Korea rose, while Hong Kong closed unchanged.
AxiTrader Asia-Pacific market strategist Stephen Innes noted that the "conspicuous moves came in bond markets".
German bunds tumbled on word that Germany is considering fiscal stimulus measures to counter an economic slowdown.
This triggered a sell-off in US Treasuries, with 10-year yields rising more than two-year ones, which undid the inversion in the yield curve.
Meanwhile, China's August factory deflation fell at its quickest in three years, serving as another reminder of the effects the trade skirmish is having on its economy.
Trading volume here clocked in at 927.37 million shares worth $989.7 million, with losers beating gainers 210 to 170.
Yangzijiang Shipbuilding climbed 3.1 per cent to $1.01. The shipbuilder maintained its position as the STI's most active with 49.9 million shares changing hands.
Institutional interest has picked up after the firm won contracts for new orders last week. UOB Kay Hian upgraded Yangzijiang to "buy" yesterday on "inexpensive valuations" and recent order wins.
The banks were higher. United Overseas Bank set the pace, rising 0.9 per cent to $25.77, while OCBC Bank rose 0.3 per cent to $10.85 and DBS added 0.7 per cent to $24.95.
Real estate investment trusts (Reits) were mostly lower with the FTSE Straits Times Reit Index falling 0.7 per cent.
CMC Markets analyst Margaret Yang said investors seemed to be "buying banks and dumping Reits, as bond yields are surging globally and (with) the US Treasury yield curve less inverted than a week ago". "With similar dividend yield, banks seem to offer better growth prospect than Reits at the moment."
Among secondary stocks, Isetan Singapore surged 9.6 per cent to $5.24 in little more than half a session on news that YTL Starhill Global Reit Management had made an offer to acquire the Japanese department store operator's Wisma Atria stake. Trading was halted in the afternoon, before both parties noted that no deal had been inked yet