Meanwhile, Indonesian equities, which were among the hardest hit amid the turmoil in emerging markets last year, made a solid comeback, emerging as the region's top performing market this year.
The Jakarta Composite is up 10.8 percent year-to-date – after declining 1 percent last year – boosted by a combination of factors including an improvement in the country's huge trade deficit, a string of upgrades in corporate earnings forecasts and upcoming presidential elections in July.
(Read more: India and Indonesia: Not so bad after all?)
Simon Grose-Hodge, head of South Asia investment advisory at LGT Bank, says the divergence in the region's market performance is partly driven by punters looking for bargains.
"Overall, investors are in search of value so we've seen a rotation out of the best performing markets and into the underperforming markets. We wouldn't consider it a good medium-to-long term approach, it's much more tactical," he said.
Overall, emerging markets in South and Southeast Asia had a decent quarter. The Philippines' benchmark PSE Composite Index is second best-performer, up 7.5 percent year-to-date, followed by Thailand's SET Composite Index and India's BSE Sensex - which have risen 4.8 percent.
Indian shares have been scaling fresh highs in recent weeks as recovery signs emerged and on hopes that the upcoming elections in April-May will spur reforms.
(Read more: Are Indian shares getting ahead of themselves?)
"With India and Indonesia, the outlook there is much trickier, both markets have done well and because of that they have a lot of two-way risk. We would probably defensive as far as both are concerned. There's perhaps better value in their bond market than equity markets at current levels," Grose-Hodge said.
This year's laggards
Markets in the region that have disappointed include Greater China, with Hong Kong's Hang Seng and China's Shanghai Composite down 6.5 percent and 3.3 percent, respectively.
A number of factors dragged on sentiment. The stability of China's financial sector has been in focus in recent months after a near high-profile failure of a trust product, which was marketed by local lender ICBC, in January. And earlier this month, China experienced its first domestic bond default when Shanghai Chaori Solar Science & Technology Co failed to make an 89 million yuan ($14.5 million) interest payment.