Business sentiment among Asia's top companies hit its highest level in more than two years in the second quarter of 2014, rising sharply on supportive political changes around the region and positive signs from China, a ThomsonReuters/INSEAD survey showed.
The ThomsonReuters/INSEAD Asia Business Sentiment Index jumped to 74 in the second quarter from 64 in the first, the highest reading since the start of 2012. A reading above 50 indicates an overall positive outlook.
Leadership change gave India and Thailand sorely-needed shots in the arm, with the two key markets powering a rise in the wider index. Robust scores from China and Australia also helped lift the index with scores of 67 and 79 respectively, both up significantly from the previous quarter.
Export-driven South Korea saw a steep drop to 50 from 67 in the first quarter on weaker trade and consumer data. Japan and Malaysia edged down slightly, while Singapore and the Philippines held flat, although the Philippines still maintained its 100 reading, the same as in the first quarter.
"At the moment, stronger U.S. growth, China providing some support to prevent collapse and the India story is still there. These are positives," said Anthony Chan, senior economist for Asia at asset management firm AllianceBernstein.
However, the sentiment spike may be short-lived. India is due a "reality check" after its election boost, China's stimulus will create only a short-term lift, and there is still plenty hanging "in the balance" for Thailand after the military coup there in May, Chan said.
The index surveyed 200 of the Asia-Pacific region's top companies in 11 economies across sectors from property, to financials and tech. Companies included Japanese clothes maker Fast Retailing, Korea's Hyundai Heavy Industries and Australian construction materials firm James Hardie Industries Plc.
The poll, conducted by ThomsonReuters in association with INSEAD, a global management and business school, was compiled in June 2-13. It showed global economic worries, rising costs and other risks including political and regulatory uncertainty were the key business concerns.
Of the 124 companies that responded 52.42 percent said they had a neutral outlook and 47.58 percent said they had a positive outlook in the second quarter of 2014. None reported a negative outlook, the first time ever in the survey's history.
Positive trends for key trade partners gave Asia a boost, said Simon Shakesheff, Sydney-based group executive for strategy and stakeholder relations at Australian property