KUALA LUMPUR (Nikkei Markets) -- Singapore shares rose Tuesday as banks advanced before the release of U.S. consumer inflation data that could provide cues on the pace of monetary tightening by the Federal Reserve.
Malaysian equities also gained, boosted by Nestle (Malaysia) climbing to a record.
Banking stocks gained ahead of the release of the U.S. consumer prices data later in the day as investors debate how many interest rate hikes the Fed will deliver this year. In December, the central bank projected three increases in 2018, but upbeat economic growth and Fed remarks that inflation is expected to accelerate later this year have fuelled bets of more aggressive tightening. The authority is widely expected to raise rates by 25 basis points at its next week's meeting.
"The spotlight is on the U.S. CPI. A surprise inflation print (in January) had sent the market into a tailspin, so a bit of caution before the data is understandable," said Stephen Innes, head of Asia Pacific trading at broker Oanda.
Economists polled by Reuters expect the CPI to rise by 2.2% in February and core CPI by 1.8%.
Among other movers on the STI, property companies rose after flash estimates from SRX Property on Tuesday showed resale prices of private apartments in Singapore climbed higher in February to a level that surpassed the January 2014 peak.
CapitaLand added 1.1%, and City Developments and UOL Group rose by 0.3% each.
Singapore Technologies Engineering added 2.3%. On Monday, the company said its aerospace arm, Singapore Technologies Aerospace, injected its pro-rata share of S$3.89 million ($2.96 million) into its joint venture ST Aerospace Aircraft Seats as working capital.
Singapore Exchange drifted lower by 0.3%. The market operator said it is stepping up efforts to bring technology companies to the local market by loosening some of the restrictions such as a minimum market capitalization it had planned to impose on dual-class listings.
JEP Holdings, a sub-contractor in the aerospace industry, lost 8.3%. On Monday, the company said it proposes to consolidate every four existing ordinary shares into one ordinary share, in a move to reduce the volatility of its stock price.
In Malaysia, the FBM KLCI index rose 0.2% to 1,864.03. Nestle (Malaysia) rose 4.6% to 157.40 ringgit, its eighth consecutive record close.
"Investors are assigning a scarcity premium to Nestle due to its strong business and popular brand. There are very few stocks like Nestle on the exchange at the moment," said Vincent Lau, vice president at broker Rakuten Trade.
Most finance stocks also advanced, a day after Moody's Investors Service said it expects profits at Malaysian banks to improve this year, helped by a stronger loan demand. Public Bank, the highest weighted stock on the KLCI, added 1.5%. Smaller rivals Hong Leong Bank and AMMB Holdings climbed 1.8% and 3%, respectively.
Marine & General rebounded from eight-year lows, jumping 7.4%. The company secured contracts worth 7.3 million ringgit ($1.88 million) to supply vessels to ExxonMobil Exploration and Production's Malaysian unit.
Industrial conglomerate UMW Holdings rose 2.2%, adding to Monday's 6.7% advance. Last week, the company announced a plan to increase control of Perusahaan Otomobil Kedua, Malaysia's top carmaker by market share. The move could lift fiscal 2019 earnings by as much as 11%, analysts at AllianceDBS said Tuesday.
Jewelry retailer Poh Kong Holdings slumped 5.2% after saying second-quarter earnings dropped 21%, dragged by higher operating costs.
Bermaz Auto, which makes cars for Japan's Mazda, rallied 6.9% after reporting a 61.2% surge in third-quarter earnings.
--Alexander Winifred & Joannah Perez