Even with the challenging and uncertain external environment, Asean economies are standing pat on their domestic reflation policies, according to a flash note by DBS.

Reflation refers to the expansion in the level of output of an economy by government stimulus, using either fiscal or monetary policy.

On the global front, markets continue to closely monitor the progress of trade negotiations between the US and China, Brexit developments, the Fed's quantitative tightening and interest rate movements, and Eurozone's political risk. But DBS analysts believe that there is still upside potential in the region.

Vietnam in particular is in the spotlight, with the country expected to benefit from the Trump - Kim meeting and supply chain diversions as a result of the China-US trade war.

In Thailand, the upcoming elections appears positive or the market amid improving consumer confidence as it marks the country's return to democracy after five years of military rule. This should be positive in terms of policy continuity, foreign direct investments (FDI), and international relations, said DBS.

As for Indonesia, the upcoming presidential election may not be a big risk factor but there could be more risks if the incumbent does not win and thus is now an overhang for the market, said DBS. However, analysts say that it is not enough to derail momentum as near term drivers continue to support consumer and banking stocks.

In Singapore, analysts noted that Budget 2019 had little impact on the Straits Times Index (STI) component stocks overall. Looking ahead, the Committee of Supply debates by the various ministries would be of interest, where more details such as the URA Master Plan 2019 on potential plans for Greater Southern Waterfront region are likely to be unveiled, added analysts.

As for Malaysia, analysts believe that its domestic strength could be underestimated and it is expected to catch up to rest of Asean. An economic recession is also unlikely for Malaysia, given its relatively healthy economic growth and strong liquidity, they said.