MANILA, Philippines ? (UPDATE) Local stocks broke past 3,900 to post a new record high on Thursday as strong investor optimism on Philippine corporate earnings and economic fundamentals powered an eight-day bull run.

The main-share Philippine Stock Exchange index racked up a hefty 97.78 points or around 2.6 percent to close at 3,902.56. This strong finish allowed the index to overshadow the previous all-time high record of 3,873.50 posted on Oct. 8, 2007.

The day's rally was led by the property sector, which skyrocketed by 6.35 percent, followed by the financial, industrial and holding firm counters, which all rose by over 2 percent.

Value turnover was high at P6.38 billion, indicating strong conviction on the upswing. There were about three gainers for every single decliner, reflecting a broad-based rally.

Over the last eight days of its winning streak, the PSEi has gained a total of 343.89 points or 9.66 percent. Year-to-date, the local index has risen by 849.88 points or 27.84 percent, making the PSE one of the best performing stock markets in the world.

Investors snapped up most large-cap stocks except for telecom giant Philippine Long Distance Telephone Co., the market's most valuable stock which is ironically not benefiting from this rally. There was likewise a strong appetite for many second-liner stocks.

The local equities market steadily rose throughout the day but it was a late buying binge that fueled the breakout past 3,900 into an unchartered territory. Net foreign buying amounted to around P684 million.

?The PSEi broke new records on the back of robust economic indicators which solidifies the Philippine economic resiliency story. We continue to be inspired by the market?s performance, which supports the reforms we have put in place,? PSE president and chief executive officer Val Antonio Suarez said.

"It's wild bull on the run. Almost everyone is joining the mad dash for equities," said Astro del Castillo, managing director at local fund management firm First Grade Holdings.

Investors loaded up on shares of Metropolitan Bank & Trust Co., Banco de Oro Unibank Inc., Megaworld Corp., Alliance Global Group Inc., Energy Development Corp., Ayala Corp., Aboitiz Power Corp., SM Prime Holdings Inc., DMCI Holdings Inc., Filinvest Land Inc., Bank of the Philippine Islands, Semirara Mining Corp., Ayala Land Inc., First Gen Corp., Universal Robina Corp., Robinsons Land Corp. and Petron Corp.

"The bull market has been driven mainly by a better-than-expected GDP [gross domestic product] growth and a decline in interest rates triggering a preference shift for equities," said Jose Mari Lacson, head of research at stock brokerage Campos Lanuza & Co.

"Momentum is clearly on the side of investors but we would also air some caution over valuations. Bull market rallies inflate stock prices," Lacson said.

He said the government would need to attract more private sector investments in order to enhance the outlook for profit growth in 2011. "At the moment, it is too early to interpret the performance and results of the Aquino administration to conclude that earnings valuations will remain attractive. But for now, just ride the rally to new highs," Lacson said.

The next PSEi target could be 4,200, said PNB Securities deputy head Manuel Lisbona, but noting that a "small" correction ? equivalent to 1-2 percent ? may be appropriate now.

"The nice thing about the market now is that there's relatively no froth. It's driven by optimism on continuing good results. I am still worried about Europe though," Lisbona said.

But on Thursday, most Asian stock markets edged higher, aided by strong US and European markets, as a successful bond sale by Portugal tempered jitters over the Greece-epicentered fiscal crisis in the Euro-zone. Only the Chinese equities market was sluggish after the Chinese banking regulator warned of risks in the financial system.

Overnight, the closely watched Dow Jones Industrial Index was up by 46.32 points or 0.45 percent to 10,387.01.