Singapore shares jumped the most in more than three-and-a-half months on Tuesday with financials leading the charge, while Philippine stocks fell as data showing mounting inflation strengthened expectations for further policy tightening this week. Singapore's FTSE Straits Times Index rose 1.7 percent to its highest close in nearly eight weeks. Oversea-Chinese Banking Corp climbed 4.1 percent higher, while United Overseas Bank Ltd rose 3.3 percent. In the Philippines, the main stock index extended declines into a second session and closed 1.2 percent lower.
"Markets are reacting to the inflation figure that came at a new height, which basically disappointed investors and raised concerns about an overheating economy," said Lexter Azurin, a senior analyst at AB Capital Securities.
Inflation quickened to 5.7 percent in July, the fastest rise in more than five years, due to higher food and transport costs. It was higher than the 5.5 percent median forecast in a Reuters poll, and near the top end of the central bank's 5.1-5.8 percent estimate for the month. The central bank, which is meeting on August 9, looks certain to raise interest rates for the third time this year, after data showed annual inflation moved further above its 2-4 percent 2018 target range.
SM Investments Corp dropped 2.1 percent, while BDO Unibank closed more than 4 percent lower.
Elsewhere in Southeast Asia, Indonesian shares edged lower with consumer and telecom stocks leading the fall. Unilever Indonesia was the biggest drag with a decline of 2.6 percent. Malaysian shares erased early falls to rise 0.6 percent to their highest close since May 25.
Digi.Com Bhd climbed 4.2 percent, while aluminium producer Press Metal Bhd was up 4.3 percent. Energy stocks helped Thai shares close 0.7 percent higher. PTT Public Co and PTT Exploration and Production rose 1.5 percent and 2.2 percent respectively, as oil prices gained.