investors’ upbeat mood

Asian stock markets roared yesterday, with Singapore’s stunning growth providing fresh evidence that the region’s economy is doing well despite lingering concern about potential fallout from the eurozone debt crisis and a fledgling recovery in the United States.

At home, shares in Sime Darby Bhd and Tenaga Nasional Bhd (TNB) led rising top 30 stocks that made up the FTSE Bursa Malaysia KL Composite Index (FBM KLCI) to propel the benchmark to its highest in two months.

The FBM KLCI settled at 1,341.08 points yesterday, up 8.61 points or 0.6% for the day. But after seven-day of consecutive wins, the index probably came under some selling pressure as it neared a two-year peak of 1,346 points achieved on May 13.

A technical analyst at a local brokerage opined that that the index needed to clear the 1,350-point hurdle to “boost its medium-term outlook.’’

Meanwhile, the market will have some local news to chew after TNB told the Bursa after the trading bell yesterday that it made a net profit of RM1.1bil in the three months ended May 31.

The stock rose 13 sen, or 1.5% yesterday to RM8.61 on volume of 7.69 million shares, on expectation that the company will benefit from a strong ringgit and a recovery in electricity demand.

Investors mood around Asia yesterday was bouyant on upbeat earnings report from Wall Street overnight. Some use earnings of major companies like Intel Corp to gauge the strength of the global economy.

The chipmaker on Tuesday posted margins and revenue forecast that exceeded market’s prediction and this triggered a rally in technology related stocks in Asia yesterday.

In Japan, the Nikkei 225 Index rose 2.7%, followed by Taiwan’s main stock index advanced 1.5%, while Korea’s main Kospi Index climbed 1.3%.

Singapore’s Straits Times Index rose 0.8% to 2,952 points after the official gross domestic product (GDP) numbers showed the republic’s economy had expanded faster than expected in the second quarter and likely to show blistering growth in the mid-teens for the full year.

Economists said the strong growth forecast for the highly trade dependant nation was a vote of confidence that the global economic recovery was intact, with international trade as the main driver.

A robust growth down south will help local exports, as Singapore is Malaysia second biggest trading partner.

“We believe this will would have been translated into a stronger GDP growth in the second quarter for Malaysia, which we estimate at around 8% and 8.5%,” AmResearch’s Manokaran Mottain said.

ECMLibra Investment Research, in a strategy report for the second half of the year released yesterday, sees the volatile market condition to remain for much of the third quarter.

The firm has a “neutral” view for the market, and pegged its year-end target for the FBM KLCI at 1,390 points. It valued the index at 15 times its projected earnings for next year.

“Earnings upgrades may have peaked as we believe the earnings upgrades cycle have finally caught up with the underlying improvement in business conditions,” it said.