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INVESTORS rode the bulls with a vengeance yesterday to drive stock markets to levels not seen since the global financial system hovered on the edge of a cliff last year.
Good economic data and better-than-expected corporate profits ignited a region-wide buying spree that has been simmering on and off for weeks.
The numbers racked up yesterday were striking, given the pain investors have been experiencing since last September.
Wall Street surged overnight to cross the 9,000 mark for the first time since January, a result that spurred Asian buyers here from the opening bell.
Singapore's Straits Times Index, led by bank and property stocks, climbed 48.53 points or 1.95 per cent to 2,533.43 - its highest level in 10 months.
Hong Kong crossed its own psychological barrier, exceeding 20,000 for the first time since the collapse of Lehman Brothers in September. It eventually closed 0.8 per cent up at 19,982.79.
Australian investors made the most of it as well, with the ASX 200 closing at 4,089.8, its highest since Nov 10. It crossed the key 4,000 mark earlier this week.
Investors have been on a hair trigger for months, itching to get back into the fray but constrained by ambiguous signs of recovery. That hesitation seems to have gone, for now at least, thanks to a slew of positive earnings results and improving housing data in the United States.
Corporate earnings there have been exceeding expectations for the most part, with three out of four releases beating forecasts.
'As markets grow more confident, we might see further highs,' said ABN Amro's Asian head of equity research, Ms Daphne Roth.
Ms Roth pointed out that many of these US firms are also giving positive guidances, indicating that the good results are no flash in the pan. That is a comfort to investors wondering if the rally is for real, she added.
Meanwhile, over here, second-quarter earnings have started to trickle in and while it is still early days, blue chips like Keppel Corp have beaten forecasts.
Many forecasters believe Asia will come out of the crisis strong. Few thought at the start of this year that China could deliver 8 per cent GDP growth this year, but this is looking more likely.
Its economy has proved resilient, growing 7.9 per cent in the second quarter.
But there are still nagging doubts about whether the massive gains racked up in world markets in recent weeks can be sustained.
There appears to be a lot of panic buying, with many investors jumping into the market as it moves higher, fearful of missing out.
'It reminds me of the Asian financial crisis. We had stock market gains, followed by a property rally, then came the dot.com bust, which brought down markets,' said Mr Lau Wing Tat, executive director of private equity firm Sunmax.
Mr Lau, former chief investment officer of DBS Asset Management, says the Singapore market could plunge to a new low in the first quarter of 2011.
The bears also point out that while investors are sitting on a lot of cash, they will not put it to work if corporate earnings start to disappoint.
'You can't cut costs forever. You need to see productivity go up,' said a broker.
JP Morgan analyst Sunil Garg cautioned: 'Are some markets in Asia getting ahead of themselves? I would think so.'
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