Emerging stocks rise as Chinese shares extend rally; won slumps

by **Cals** Tue 21 Jul 2015, 17:02

Emerging stocks rise as Chinese shares extend rally; won slumps

KUALA LUMPUR (July 21): Emerging-market stocks headed for their first advance in three days as a gauge of telecommunication companies climbed to a two-week high, countering a decline in oil producers. The Korean won slumped.
China Unicom Hong Kong Ltd. ([You must be registered and logged in to see this image.] Financial Dashboard) jumped 7.3 percent after a surge in monthly 3G and 4G subscribers. The Shanghai Composite climbed for a fourth straight day. Infosys Ltd. gained the most in two years in Mumbai after raising a revenue forecast. Sun Pharmaceutical Industries Ltd. plunged after saying its profit will be affected by costs related to a merger. Thailand’s SET Index was poised for a correction. The won fell 0.6 percent.
The MSCI Emerging Markets Index added 0.3 percent to 938.35 as of 1:57 p.m. in Hong Kong. The outlook for oil prices and bullion has soured as the strengthening of the U.S. economy pushes the Federal Reserve toward boosting interest rates for the first time since 2006. China’s stocks headed for their longest stretch of gains in almost two months amid a bull market rally for smaller companies.
“Our China strategist thinks the most volatile period is over, although the consolidation may continue into the reporting season,” Mixo Das, a strategist at Nomura Holdings Inc. ([You must be registered and logged in to see this image.] Financial Dashboard) in Singapore, said by e-mail. “The supply side is just stronger than demand right now” for crude, he said.
The developing nation gauge has fallen 1.9 percent this year and trades at 11.6 times its projected 12-month earnings. That compares with a multiple of 16.6 times for the MSCI World Index of developed nations, which has risen 4.2 percent in 2015.
Chinese Shares
Seven of 10 industry groups in the MSCI Emerging Markets Index advanced, led by a 1.5 percent rally in a measure of telecom shares. China Unicom surged in Hong Kong after its June mobile 3G and 4G net subscriber additions reached 5 million.
The Shanghai Composite gained 1.2 percent, heading for its first close above 4,000 since July 1. The ChiNext index of small-caps rallied 2.3 percent, adding to its gains of more than 20 percent since its July low. The Hang Seng China Enterprises Index increased 1.3 percent.
Infosys surged as much as 15 percent after India’s second- largest software developer raised its full-year sales forecast. The rally helped counter a 13 percent slump for Sun Pharmaceutical after the nation’s most valuable drugmaker said its annual profit will be weighed by some costs and charges linked to the merger with Ranbaxy Laboratories Ltd. The S&P BSE Sensex was little changed.
Daewoo Shipbuilding & Marine Engineering Co., the world’s second-largest shipbuilder, surged 14 percent in Seoul after Chief Executive Officer Jung Sung Leep informed employees of a coming restructuring. The South Korean won weakened to the lowest level in two years.
Kasikornbank PCL dropped 3.2 percent in Bangkok, leading a 0.9 percent decline for the benchmark SET index. The gauge has dropped 10 percent from this year’s high and is poised to enter a correction. The baht dropped 0.2 percent.
The FTSE Bursa Malaysia KLCI Index climbed 0.1 percent. The stock gauge was frozen for almost an hour earlier on Tuesday because of a malfunctioning price feed from the exchange. Individual stocks were still traded during the disruption. The stock exchange operator said it was investigating the cause.
Philippine equities rose 0.7 percent, while Taiwan’s Taiex added 0.3 percent.