"Risk-on sentiment returns with sputtering U.S. economic data putting the Fed policy easing back in focus," ING said in a note.
"Disappointing services data and still widening trade deficit in the United States has stoked expectations that the Fed is on track to cut policy rates as early as July," it added.
Data showed the U.S. trade deficit jumped in May and Sino-U.S. trade tensions helped drive activity in the services sector to a two-year low in June, while private employers added far fewer-than-expected jobs to their payrolls.
Singapore's index <.STI> advanced, after two tepid sessions where the index closed flat. Lender Oversea-Chinese Banking Corporation Ltd gained 0.4% while conglomerate Jardine Matheson Holdings added 0.7%.
Malaysia's benchmark <.KLSE> traded sideways as winds of caution rose ahead of the release of its May trade data, which is due at 0400 GMT.
A Reuters poll showed that its exports likely increased 3.6% in May from a year earlier, faster than the previous month.
"Electronics exports are holding up relatively well in face of large declines elsewhere. A stark contrast with Singapore... probably reflects supply chain relocation from Singapore to Malaysia," ING noted.
"Even so, it's hard to see Malaysia's electronics exports continuing to defy the global downturn."
Vietnam's index <.VNI> was the top gainer in the region, up 0.6%. Joint Stock Commercial Bank for Foreign Trade of Vietnam and Vingroup JSC were among top boosts to the index, rising 2.2% and 0.4% respectively.
Thai stocks, the region's sole gainer in the previous session, rose 0.3%. Recent strength in the Thai baht has driven a surge in foreign fund inflows since June.
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SOUTHEAST ASIAN STOCK MARKETS at 0303 GMT
Change on the day
Market Current Previous close Pct Move
Singapore 3375.6 3367.8 0.23
Bangkok 1743.44 1738.51 0.28
Manila 8101.58 8092.68 0.11
Jakarta 6375.533 6362.622 0.20
Kuala Lumpur 1690.34 1690.05 0.02
Ho Chi Minh 966.02 960.39 0.59
Change so far in 2019
Market Current End 2018 Pct Move
Singapore 3375.6 3068.76 10.00
Bangkok 1743.44 1563.88 11.48
Manila 8101.58 7,466.02 8.51
Jakarta 6375.533 6,194.50 2.92
Kuala Lumpur 1690.34 1690.58 -0.01
Ho Chi Minh 966.02 892.54 8.23
(Reporting by Rashmi Ashok in Bengaluru; editing by Rashmi Aich)
By Rashmi Ashok