For my answer, I'm going to build off my previous assertion (found here) that the narrator of this poem is "one who is living in the tension of faith and disbelief" and that the "I" stands for a spiritual doubter in the midst and aftermath of war.
Alongside the context of war, night and day become another dichotomy in the poem to reflect a violent struggle. We have good v. evil, life v. death, war v. peace, faith v. doubt, and now night v. day. In the first line "night crushed out the day." Night starts out the poem on the winning side, which is indicative of the tone the whole poem will take. A force of evil, of darkness, has triumphed over good, over the light. Given the spiritual struggles contained herein, I think it's appropriate to see Genesis echoed here. It's not "Let there be light" and "God saw that it was good." Instead, Owen begins the poem with the inverse of Genesis and gives us an image of darkness winning in a battle against light. The violent triumph that the phrase "crushed out" connotes is essential to how Owen establishes mood here immediately.
Night then becomes a time of "stillness," a time that is the absence of life or human presence. It is a void: "no ghost woke" and "never one fared back to [him] or spoke." Again in Genesis the void, the chaos, is prior to light existing; here we are back in that dark void. In a sense Owen is inverting the order of Genesis. By having night triumph over day, he can effectively subvert traditional Judeo-Christian concepts of lightness and darkness (or at least call them into question) and further underscore the spiritual doubt of the speaker.
We might traditionally expect that with the coming of a new day at dawn, light would again be victorious, life would appear, and all doubts would dissipate. That is not what Owen presents. Instead, dawn is "indefinite" and "unshapen." This is quite a contrast to night crushing out day. Here dawn seems battered, "vacant." There is no triumphant "Let there be light" proclamation. The dawn is weak and "sad as half-lit minds," possibly like the minds that still believe that good will defeat evil.
What then we arrive at in the final stanza is a conclusion that the forces of death and darkness have defeated those of goodness and light. The consequence of war is the inversion of the moral order of Christianity. Good is not the victor; instead, night reigns, having weakened the forces of light.