HONG KONG, Sept 3 — Emerging-market stocks gained the most in a week after a gauge of China service industries rose.

The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong jumped 2.2 per cent to the highest level since December 10, led by Industrial & Commercial Bank of China Ltd. Software-services companies Infosys Ltd and Tata Consultancy Ltd paced gains in India’s S&P BSE Sensex index, which headed for its longest rally in two years. The Jakarta Composite Index rose to an all-time high, while the rupiah dropped the most in four weeks.

The MSCI Emerging Markets Index increased 0.4 per cent to 1,091.33 at 1:05pm Hong Kong time. A private gauge of non- manufacturing activity in China for August jumped after its lowest-ever reading the previous month, bolstering optimism the government is succeeding in shifting the world’s second-biggest economy away from exports and investment toward domestic consumption.

“The improving growth outlook in China may help attract more fund inflows into emerging markets because Chinese demand is the key driver for their economies,” Komsorn Prakobphol, an investment strategist at Tisco Financial Group Pcl, said by phone in Bangkok. “Concern about an economic slowdown in China has eased substantially.”

More money flowed last month into China and Russia exchange-traded funds than any other emerging markets. US-based ETFs focused on China attracted US$944 million in August, or 10 per cent of their market value, according to data compiled by Bloomberg.

Telecom, financial

The developing-nation gauge has gained 8.9 per cent this year and is valued at 11.3 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has risen 5.2 per cent and trades at a multiple of 15.1.

Nine out of 10 industry groups in the emerging-markets measure advanced, led by telecom and financial companies. The Hang Seng China index gained the most in three weeks. ICBC, China’s largest lender, climbed 2.8 per cent in Hong Kong. China International Marine Containers (Group) Co surged 7.6 per cent, the biggest gainer in the developing-nation index. China Vanke Co, the largest property developer, jumped 4.6 per cent.

China PMI

The Shanghai Composite Index added 0.6 per cent, poised for the highest close since June 3, 2013. An official non- manufacturing purchasing managers’ index for China’s services sector rose to 54.4 in August, from 54.2 in July, while a similar gauge from HSBC Holdings Plc and Markit Economics jumped to 54.1 from 50. Factory gauges released Sept. 1 indicated Chinese manufacturing growth is slowing.

The Jakarta Composite Index rose as much as 0.5 per cent, surpassing a record closing high. Indonesian President-elect Joko Widodo may ease fuel subsidies as early as next month, when his term begins, aiming to free up state funds to invest in Southeast Asia’s largest economy.

The rupiah dropped 0.4 per cent against the dollar, the sharpest loss since August 7. The Malaysian ringgit and Philippine peso weakened at least 0.3 per cent.

India’s S&P BSE Sensex gained 0.6 per cent to a record, poised for a ninth day of gains and the longest winning streak since September 2012. Tata Consultancy climbed 3 per cent to an all-time high, while Infosys added 2.3 per cent, bound for the highest close since March 7.

The Philippine Stock Exchange Index advanced 1.4 per cent, heading for a 16-month high. Vietnam’s VN Index climbed 0.8 per cent and Thailand’s SET Index added 0.4 per cent. — Bloomberg