China Rail Stocks Rally on Planned Spending Increases

        0425 GMT [Dow Jones] Beaten-down China rail stocks are surging in Hong Kong after state-owned China Railway Corp. said it will increase railway investment this year by about a third, to CNY800 billion (US$95.8 billion). That's "significantly higher than the market expectation," HSBC says, noting it had expected CR to spend about CNY633 billion this year. "It's also worth noting that the revised rail investment budget...was at a similar level to 2010, i.e. during the fiscal stimulus period," HSBC says. Shares of China's two main rail contractors, China Railway Group. (0390.HK) and China Railway Construction (1186.HK), surge 7.8% and 6.9%, respectively. Still, both remain far from positive territory for the year. Before Friday, China Railway had fallen for seven straight sessions. (mia.lamar@wsj.com)
        (END) Dow Jones Newswires

        May 02, 2014 00:25 ET (04:25 GMT)