KUALA LUMPUR - Stocks in Malaysia are expected to edge upwards in the months ahead due to favourable economic conditions as US-led foreign investors selectively snap up blue-chips, analysts said.

Lee Soo Kai, economist with local brokerage OSK Research Bhd, believes the Kuala Lumpur Stock Exchange Composite Index could hit 760 points by the end of the year. It closed Friday at 681.57.

Lee attributed the strong market outlook to a low interest rate regime, abundant liquidity and modest economic recovery spurred by a recent stimulus package.