Most Southeast Asian stock markets eked out small gains on Tuesday as the prospects of a less-hawkish interest rate policy by the US Federal Reserve helped market participants overcome concerns of immediate capital outflows from the region. Expectations that the Fed would have to step up rate hikes to counter inflationary pressure from President Donald Trump's stimulus are also waning after the US central bank dropped no hints of an acceleration in credit tightening last week.
"There is a little bit more room for the Federal Reserve to manoeuvre its monetary policy," said Taye Shim, head of research at Jakarta-based Mirae Asset Sekuritas.
"So, I would not be so stuck with the Fed's guidance of three rate hikes this year. I think there is still a possibility that it's going to be two rate hikes this year. For now, I think the Fed's accommodative monetary stance is enough of a relief to drive the markets higher."
In Thailand, shares closed 0.3 percent higher, with energy stocks accounting for nearly half the gains. PTT PCL ended 1 percent higher.
Indonesian shares were up marginally, rising for six out of seven sessions, supported by energy and financial stocks.
Coal miner Baramulti Suksessarana Tbk and PT Bank Central Asia Tbk both hit record highs.
Philippine shares pared early gains to close slightly higher, led by industrials. International Container Terminal Services Inc closed up 3.1 percent.
Malaysia was up 0.3 percent, while Singapore closed marginally lower.
In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.4 percent as of 1031 GMT.