SE Asia Stocks-Rise on U.S.-Mexico trade optimism; Malaysia hits over 3-mth closing high

* Malaysia posts three-month closing high

* Philippines posts over two-week closing high

* Trade tensions seen lingering for some time - Mizuho

By Sumeet Gaikwad

Aug 28 (Reuters) - Southeast Asian stock markets rose on

Tuesday in tandem with Asian peers as global trade worries

briefly ebbed following a deal by the United States and Mexico

to overhaul the North American Free Trade Agreement (NAFTA).

Investors expect Canada, too, would agree to the new terms

to preserve the three-nation pact, ultimately dispelling the

economic uncertainty prompted by U.S. President Donald Trump's

repeated threats to ditch the 1994 NAFTA accord.

"Some market participants see the new accord as a sign that

trade war risk is receding, as it shows that the U.S. can still

negotiate in good faith. It is probably premature to jump to

that conclusion as Trump suggested that it is "not the right

time to talk" with China. As a result, heightened trade tension

is expected to linger for some time," Mizuho Bank said in a

note.

MSCI's broadest index of Asia-Pacific shares outside Japan

was up 0.5 percent.

Financial and industrial stocks helped the Philippines index

close at its highest in nearly three weeks.

Blue chips SM Investments Corp and BDO Unibank

added over 2 percent each to the index.

Thai stocks edged higher, buoyed by energy stocks

with PTT and PTT Exploration and Production

climbing around 1 percent each.

Thailand's manufacturing production index in July rose 4.6

percent from a year earlier, helped by higher production of

cars, sugar and electronics.

Singapore stocks ended higher helped by gains in

financials.

Oversea-Chinese Banking Corp was the biggest boost

to the benchmark, closing up about 2 percent, while United

Overseas Bank advanced 1.6 percent.

"I think today it's actually playing up its (Singapore)

stronger relation with the mainland market. The mainland markets

are getting flooded with a lot of cash right now, and I think

that's why we're seeing some opportunistic buying, some

bartering and certainly some bargain-hunting take place," said

Stephen Innes, head of trading, Asia Pacific, at Oanda.

Malaysian shares rose 0.8 percent to 1,826.9, its

highest close since May 22, led by financial and telecom stocks.

Axiata Group ended over 3.7 percent higher while

CIMB Group Holdings firmed 2 percent.

The Jakarta index rose to an over-two-week closing

high, but gains in financials and telecom were capped by losses

in consumer discretionary stocks.

Telekomunikasi Indonesia added 3.5 percent to the

index while Astra International was down 3 percent at

close.

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SOUTHEAST ASIAN STOCK MARKETS

Change on the day

Market Current Previous close Pct Move

Singapore 3247.55 3225.62 0.68

Bangkok 1718.15 1717.24 0.05

Manila 7844.61 7766.47 1.01

Jakarta 6042.65 6025.968 0.28

Kuala Lumpur 1826.9 1811.6 0.84

Ho Chi Minh 995.19 991.92 0.33

Change on year

Market Current End 2017 Pct Move

Singapore 3247.55 3402.92 -4.57

Bangkok 1718.15 1753.71 -2.03

Manila 7844.61 8558.42 -8.34

Jakarta 6042.65 6355.654 -4.92

Kuala Lumpur 1826.9 1796.81 1.67

Ho Chi Minh 995.19 984.24 1.11

(Reporting by Sumeet Gaikwad in Bengaluru, Additional reporting

by Ambar Warrick; Editing by Sunil Nair)