Most Emerging Stocks Rise as Infosys, China Rail Shares Rally

Most emerging-market stocks rose as Infosys (INFO) Ltd. and Chinese rail companies surged, overshadowing concerns that China's economy is slowing.

Infosys rallied the most in six months in Mumbai after the company's earnings beat estimates. CSR Corp. and China Railway Construction Co. (1186) jumped at least 7 percent in Hong Kong on speculation they will benefit from the resumption of a bidding process to supply the government. The Shanghai Composite Index (SHCOMP) sank 1.5 percent on concern the government may tolerate a slower pace of expansion than officials have previously indicated.

About 277 stocks rose and 236 fell in the MSCI Emerging Markets Index, which was little changed at 942.63 as of 2:11 p.m. in Hong Kong. The gauge has gained 2.7 percent this week after Federal Reserve Chairman Ben S. Bernanke indicated the U.S. economy will continue to need stimulus. Chinese Finance Minister Lou Jiwei signaled yesterday the world's second-biggest economy may expand less than the government's target this year and that growth as low as 6.5 percent may be tolerable in the future.

"Bernanke's comment helped settle a market that turned finicky from the previous perception that stimulus will be abruptly stopped," Rico Gomez, who helps manage $2.8 billion at Rizal Commercial Banking Corp., said in Manila. "A slowdown in china's growth will affect demand not only for commodities, which are experiencing a decline in prices."

The Philippine Stock Exchange Index (PCOMP) rose 2.4 percent while India's S&P BSE Sensex gained 0.7 percent to a six-week high. Benchmark gauges in Taiwan, Indonesia, Malaysia and Thailand rose at least 0.2 percent. Trading volumes for the Shanghai Composite Index were 26 percent above the 30-day average, according to data compiled by Bloomberg show.

Net Buyers

Foreign institutional investors were net buyers of $989 million of Thai, South Korean, Indonesian, Taiwanese and Philippines stocks yesterday, according to stock exchange data.

Fed Chairman Ben S. Bernanke said July 10 that "highly accommodative monetary policy for the foreseeable future is what's needed."

A gauge of industrial companies in MSCI's developing-nation index advanced 0.6 percent, the most among all 10 industry groups. A measure of consumer discretionary shares sank 1.1 percent. Infosys, India's second-largest software exporter, jumped 11 percent. The company said net income rose 3.7 percent to 23.7 billion rupees ($397 million) in the three months ended June, from 22.9 billion rupees a year earlier, as the rupee's fall to a record boosted the value of overseas sales. That exceeded the 23.2 billion-rupee median of 45 analyst estimates compiled by Bloomberg.

Rail Rally

CSR, China's biggest train maker, added 7.3 percent, the most since Sept. 6. China Railway surged 9.3 percent, the steepest increase since December 2011. China may start taking bids to supply bullet trains in the second half, the Shanghai Securities News reported, citing an unidentified rail transportation equipment company.

"This is a short-term positive for train providers as there will be an increase in orders," said Li Kun, an analyst at Northeast Securities Co. "The bidding process was stopped last year."

China's Shanghai Composite Index dropped for the first time in four days, paring the benchmark index's biggest weekly gain in two months. The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in Hong Kong fell 1.1 percent, the first loss in three days.

Finance Minister Lou said he's confident in achieving a 7 percent growth rate this year. That's below the government's official growth target of 7.5 percent. He made the comment while attending a two-day U.S.-China Strategic and Economic Dialogue in Washington.

Korean Automakers

Hyundai Motor Co. (005380), South Korea's largest automaker, sank 5.9 percent in Seoul as wage negotiations with its union failed to make progress and amid concern Chinese vehicle demand will fall. Affiliate Kia Motors Corp. (000270) fell 4.7 percent. The benchmark Kospi index dropped 0.4 percent.

The MSCI developing-nations gauge has lost 11 percent this year, compared with a 12 percent increase in the MSCI World Index of developed-country stocks. The emerging-markets measure trades at 9.9 times 12-month projected profit, compared with the MSCI World's 13.8 times, data compiled by Bloomberg show.