SINGAPORE: Southeast Asian stock markets rose on Tuesday ahead of a two-day policy meeting of the US Federal Reserve that will be keenly watched by investors for any fresh hints on whether it will raise interest rates again this year.

Investors are betting that subdued US inflation and political strains in Washington would limit any rate moves for the rest of the year.

The Fed is widely expected to keep interest rates unchanged at the meeting, which will discuss its monetary stance and the timing of its long-awaited balance sheet reduction, a plan most likely to be detailed in September.

Officials at the Fed are torn between wanting to start reducing its bond portfolio within the year and waiting for more economic data, said Grace Aller, an analyst with Manila-based AP Securities.

“As such, analysts are now pricing in less than 50 percent chance of a third rate hike this year,” she said.

In Southeast Asia, Singapore rose 0.5 percent to touch a two-year closing high. Oversea-Chinese Banking Corp gained 1.4 percent, while Thai Beverage climbed 3.8 percent to close at its highest in five months.

Philippine shares ended slightly higher after rising as much as 0.5 percent in early trade, as gains were capped by losses in financial stocks.

Metropolitan Bank and Trust Co closed 3 percent lower, while BDO Unibank dropped 1.1 percent.

Property developer Ayala Land rose 1.3 percent to hit a record closing high.

Vietnam shares closed 1 percent higher, their biggest gain in seven weeks, with financials and energy stocks pulling up the index. Thai and Indonesian shares were up marginally.—Reuters