The slowly improving relationship between the United States and China cheered investors this week and gave the market a lift, although it was still somewhat muted.
Moves by central banks around the world to combat flagging economic growth, including expectations that the US Federal Reserve will lower rates next week, have boosted sentiment as well.
Local shares here were also bolstered by the European Central Bank announcing a fresh round of economic stimulus and a cut that takes the deposit rate to minus 0.5 per cent, an all-time low.
The Straits Times Index (STI) closed at 3,211.49 points yesterday, up 16.53 points, or 0.52 per cent, and 67.01 points, or 2.1 per cent, up for the week. Elsewhere, Australia, Hong Kong and Japan closed higher. Malaysia was flat while China, South Korea and Taiwan were shut for the Mid-Autumn Festival holiday.
With investors rediscovering their risk appetite, gold eased below US$1,500 per ounce.
"If the confluence of diminishing risks continues, and central banks continue to walk back the markets' dovish rate cut expectations, gold may ease further," said AxiTrader Asia-Pacific market strategist Stephen Innes.
Trading volumes here clocked in at 939.16 million shares worth $938.46 million, with gainers trumping decliners 243 to 135. Only three of the blue-chip index counters closed in the red.
The banks had a mixed trading session. United Overseas Bank was unchanged at $26.41, DBS put on 0.8 per cent to $25.56, while OCBC Bank rose 0.8 per cent to $11.10.
Property giant City Developments added 0.4 per cent to $9.84. The developer's takeover offer for Millennium & Copthorne Hotels turned unconditional, with its delisting from the London Stock Exchange expected to be effective on Oct 11.
The best performers included AEM Holdings, which jumped 3.5 per cent to $1.19. The equipment manufacturer has increased its tally for sales orders for the 2019 financial year to $280 million and raised its revenue guidance for this year.
Boustead also saw active trading, advancing 4.1 per cent to 76.5 cents on 25.3 million shares traded. The vast majority of the counter's turnover was down to a married trade involving 23.7 million shares at 73.5 cents.