Most South-east Asian stock markets eked out gains on Tuesday as investors took a cautiously optimistic stance ahead of a US Federal Reserve policy meeting that could provide cue on the pace of rate hikes in the months to come. A poll of 100 economists conducted last week showed the Fed was certain to push interest rates up by 25 basis points to 1.00 percent-1.25 percent at its June 13-14 meeting.
However, the conviction for a move beyond a widely expected rise this month has faded for many forecasters along with the outlook for inflation for most. “(We) expect Asian bourses to continue to tread water with a topping of caution ahead of the Federal Open Market Committee (FOMC),” OCBC Bank said in a note.
The positive sentiment across the region was also supported by oil prices which edged up in early trade, following statements that OPEC leader Saudi Arabia was making significant supply cuts to customers. Singapore shares were up, rebounding from Monday’s decline on the back of gains in the city-state’s “big three” banks. Advancing issues barely outnumbered declining ones by 1.34 to 1.
The final first-quarter jobless rate was revised downwards from the preliminary estimate of 2.3 percent, according to unemployment data released by the Ministry of Manpower. Thai shares rose, underpinned by gains in materials and financials, while Indonesian shares inched up with financials and consumer staples driving the gains after Moody’s changed its outlook for the country’s banking system to “positive” from “stable” as it expects banks to see improvements in their operating environment and asset quality.
Bucking the trend, Philippine shares fell half a percent with industrial and real estate stocks together accounting for about two-thirds of the falls.