Most Southeast Asian stock markets rose on Monday, with Philippines leading the pack, as hopes of the US Federal Reserve maintaining a dovish stance at a policy meeting on Wednesday buoyed risk appetite. With growth due to slow over the next three years and the Fed's preferred measure of inflation not expected to show any significant pick up, an increasing number of economists have turned dovish on the US interest rate outlook with a hike expected only in the third quarter, according to a Reuters poll.
The Fed's rigorous rate hike cycle last year had taken a toll on Southeast Asian economies, compelling central banks in the region to tighten their monetary policies.
As these pressures subside, the central banks look to ease policies. Investor sentiment toward risk assets in the region has improved ahead of a slew of central bank policy meetings scheduled for the week.
Philippine stocks bounced back from earlier losses to close 1 percent higher, with gains concentrated in industrials.
The Philippine central bank will likely keep the interest rate on its overnight reverse repurchase policy steady at 4.75 percent on Thursday, while it may cut the amount of cash that banks must hold as reserves.
Shares of SM Investments Corp and SM Prime Holdings Inc advanced 1.7 percent and 2 percent, respectively.
Indonesian stocks rose 0.8 percent to a more than two-week closing high, boosted by telecom and financial stocks. Telekomunikasi Indonesia and Astra International Tbk rose 2.4 percent each. Malaysian shares added 0.6 percent, buoyed by a 3 percent gain in utility Tenaga Nasional Bhd.
Singapore shares rose 0.4 percent after data showed an unexpected rise in February non-oil domestic exports.
Singapore's exports rebounded from their biggest fall in over two years in January, but economists say a decline in electronics shipments shows global demand has not improved.
DBS Group Holdings Ltd rose 0.4 percent, while Jardine Strategic Holdings Ltd gained 0.7 percent.
Meanwhile, Thai stocks fell for a third straight session on caution ahead of general elections. "Investors who are still not sure of the outcome of the election are holding their investments on the sidelines and are not so active in Thai markets now," said Teerada Charnyingyong, an analyst with Phillip Capital Thailand.
CP All Pcl dropped 2 percent, while Airports of Thailand Pcl declined 1.5 percent.