Southeast Asian stocks rallied on Wednesday in line with Asian peers as prospects of solid US growth and further monetary stimulus in major markets whetted investor risk appetite, with the Vietnam index hitting its highest in more than 8 years. "There is quite a bit of optimism about policy stimulus in the pipeline. They are looking at BOJ (Bank of Japan) prepping to do more. They are expecting the BOE (Bank of England) to do something tomorrow," said Vishnu Varathan, a senior economist with Mizuho Corporate Bank in Singapore.
"So, there is an entire line-up of monetary and fiscal policy stimulus." Vietnam climbed 2.5 percent to its highest since February 2008, with sentiment boosted after state oil group PetroVietnam raised the country's 2016 crude oil output target to about 17 million tonnes, higher than previously expected. Philippine shares extended gains for a fourth straight session to close at a more-than 1-year high following a positive ruling by an international arbitration court over its claims in the South China Sea.
Indonesia also ended at a more than 1-year high, driven by telecom and consumer stocks. Malaysia closed at more than 1-month high after its central bank surprised markets by cutting the key interest rate for the first time in seven years in a bid to keep the country on a "steady growth path". Asian shares rose, with the MSCI's broadest index of Asia-Pacific shares outside Japan climbing as much as 0.4 percent.
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