Southeast Asian stock markets rose on Tuesday as hopes of higher oil output from producers revived risk appetite and bargain hunters bought Thai banks on expectations of higher interest rates. Kuwait's oil minister said Opec was in talks to boost production for the first time in more than two years, which prompted late buying in the region and pushed up Asian stocks elsewhere.
The MSCI ex-Japan index was up 0.7 percent while emerging market stocks were 0.4 percent higher at 0936 GMT. Most regional indexes hovered around multi-week highs but market players were still cautious about inflationary pressure, which put economic growth at risk, dealers said. Turnover on the Thai stock market, the most active in the region, was almost double its 30-day average, although Singapore's fell to 0.6 times its average.
In Bangkok, inflation and interest rates were centre stage, with the Bank of Thailand reviewing policy on Wednesday and widely expected to raise rates by 25 basis points to 2.5 percent.
Leader Bangkok Bank surged 3.4 percent to the highest in almost two months. Second-ranked Krung Thai Bank climbed 2.4 percent to six-week highs after its president told Reuters of Southeast Asia expansion. Resource shares posted good gains despite easing oil prices. Thai oil exploration firm PTT Exploration and Production jumped 2.5 percent and Indonesian coal miner Adaro Energy rose 1.1 percent. Banks in Singapore were among bright spots, with leader DBS Group Holdings and United Overseas Bank more than 1 percent higher. Dealers attributed the buying to short-covering.
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