Most Southeast Asian stocks edged higher as cautious investors kept a keen eye out for Britons voting to decide the future of their country in a referendum on Thursday, even as bookmakers' odds shifted in favour of remaining in the European Union. The sterling gained more than 1 percent to a 2016 high against the dollar in morning trade in London, with betting exchange Betfair showing odds of around 15 percent for a vote to leave, down from more than 40 percent a week ago before the killing of British lawmaker Jo Cox.
Asian markets remained erratic, thin and cautious, as investors remained largely on the sidelines ahead of the referendum as a closely fought vote meant any large positions taken before the outcome was vulnerable to being stopped out. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 percent while many markets in Asia were flat to slightly negative.
Market volatility has already spiked in the run up to the referendum, with the CBOE Volatility index up 14 percent on Wednesday alone as polls showed the outcome was too close to call. In light of the Brexit vote, risk sentiment is affecting Southeast Asian markets, said Grace Aller of AP Securities in Manila. Vietnam shares closed nearly 1 percent higher on expectations of upbeat corporate earnings, traders and analysts said. Financial stocks led the gainers. Vietcombank, Vietnam's top lender by market value, rose 2.6 pct.
Thai stocks closed higher, led by energy and financial stocks, with Thailand's fourth-largest lender by assets Kasikornbank closing up 3.1 percent. Philippine shares extended losses into a second straight session, dragged down by financial stocks. The Philippine central bank kept its benchmark interest rate steady on Thursday, as expected, and said it was prepared to act to contain any market volatility that might stem from Britain's vote on whether to exit the European Union. Jakarta ended lower, snapping four days of gains, weighed down by consumer stocks.