Southeast Asian stock markets rose on Monday, on expectations of a rate cut by the US Federal Reserve, following weak US jobs data, and as a deal between Mexico and the United States soothed fears of another front to a trade war.
US job growth slowed sharply in May and wages rose less than expected raising hopes of an imminent rate cut while US President Donald trump calling off tariffs against Mexico helped calm investors who feared another front to a global trade war.
"The movement was driven by the news of tariffs not being implemented against Mexico. Expectations of a rate cut going forward is also providing some level of support to the market. Markets have generally been oversold over the last one month," said Joel Ng, an analyst with KGI Securities.
Asian equity markets saw heavy outflows in May as a sudden escalation in the US-China trade war threatened to put more pressure on export-reliant regional economies and companies which are highly reliant on Chinese sales.
The sell-off, however, seems to be wearing off with broader Asian stocks firming. MSCI's index of Asia-Pacific shares outside Japan rose as much as 1%.
Indonesian stocks rose 1.3% to close at an over one-month high, with financial and telecom stocks aiding the rise. Shares of Telekomunikasi Indonesia and Bank Negara Indonesia gained 3.6% and 3.3%, respectively.
The country's 45 most liquid stocks gained 1.9%. Singapore's benchmark pared some of its earlier gains to close 0.7% higher, with real estate stocks boosting the index helped by a 5.9% rise in shares of City Development Ltd following progress on the Millennium & Copthorne Hotels Plc acquisition. Millennium & Copthorne Hotels has agreed to the takeover proposal from City Developments in a deal that values the British company at 2.23 billion pounds ($2.84 billion), the companies said on Friday.
Meanwhile, the Philippine index gained 0.8% on the back of real estate and industrial stocks. The Thai index extended gains into a fifth straight session underpinned by energy and financial stocks. PTT Exploration and Production PCL and Bank of Ayudhya PCL rose 2.4% and 0.7%, respectively. Consumer and financial stocks helped push the Vietnam index 0.5% higher, while the Malaysian benchmark rose 0.4% supported by telecom and industrial stocks.