SINGAPORE- China helped Asian stocks rise from 11-month lows on Wednesday as investors cheered the approval of a trillion-yuan sovereign issue as a harbinger of stimulus, while the Aussie dollar jumped after hotter-than-expected inflation lifted rate forecasts.
MSCI’s broadest index of Asia-Pacific shares outside Japan which hit its lowest since last November on Tuesday, rose 0.6 percent and the Hang Seng climbed more than 1 percent . Japan’s Nikkei rose 1.2 percent .
US Treasuries held onto a bounce-back after the 10-year yield breached 5 percent on Monday, with the benchmark yield firm at 4.82 percent .
Shares in Google parent Alphabet fell 6 percent in after-hours trade on investors’ disappointment at its slowing cloud business, while Microsoft shares rose nearly 4 percent – leaving Nasdaq 100 futures 0.4 percent lower in Asia trade.
European stock futures were steady, while oil and the euro were weighed by Tuesday’s weaker-than-forecast purchasing managers surveys on the continent. Euro zone lending data and a German business survey are due later in the session.
China’s blue-chip CSI300 index which had been pinned near four-year lows, rose 0.5 percent .
China’s top parliament approved a 1 trillion yuan ($137 billion) bond issue, state media reported, adding the funds would be spent rebuilding disaster zones and improving infrastructure.
Also helping the mood was state-owned investment company Central Huijin announcing it was buying exchange-traded funds, a move which has sparked strong rallies in the past.
“Government expenditure will help the economy to stabilize further and strengthen growth in the fourth quarter,” said Steven Leung, executive director of institutional sales at broker UOB Kay Hian in Hong Kong.
Central Huijin promising ETF purchases drove rallies of more than 20 percent in 2013 and 2015, according to UOB, and Leung said the signal had given a strong boost to sentiment. Hong Kong leader John Lee also said stock-trading duties and some property stamp duties would be cut in his annual policy statement.