Asia stocks rose on Wednesday after China’s President Xi Jinping approved a 1 trillion yuan (£111bn) sovereign issue, buoying hopes of the economy stabilising. 

Shanghai’s CSI300 Index bounced 0.5pc, coming after Asian stocks hit 11-month lows yesterday. Hong Kong’s Hang Seng was up more than 1pc, while Japan’s Nikkei rose 1.2pc and the MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6pc. 

The rise followed the Chinese government stepped up spending plans, announcing the 1 trillion yuan sovereign bond issuance which state media said would be used to help rebuild areas hit by this year’s floods. The funds are also expected to be used to improve urban infrastructure to cope with future disasters. 

Steven Leung, executive director of institutional sales at broker UOB Kay Hian in Hong Kong, said: “Government expenditure will help the economy to stabilise further and strengthen growth in the fourth quarter.”

Half the funds are expected to be spent this year, while the other half will be used next year. 

Reports suggested that the increase in bond issuance comes ahead of as Beijing injecting a fresh dose of fiscal stimulus in an effort to shore up the economic recovery. 

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