GLOBAL MARKETS-Dollar hits 16-month high, stocks rebound after inflation scare

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The dollar rose on Thursday, hitting a 16-month high a day after the strongest U.S. inflation reading in more than three decades, while equities gained on expectations higher consumer prices will help corporate growth.

The UK’s blue-chip stock index hit 20-month highs as China-exposed miners listed in London bounced on relief that property developer China Evergrande averted a default. European shares rose after Goldman Sachs said regional earnings have been resilient to supply chain snags, a message that echoed on Wall Street as investors view the impact on rising prices as temporary but positive for corporate profits.

“Inflation in and of itself isn’t always a bad thing for the equity market,” Don Townswick, director of equity strategies at institutional asset manager Conning. “Typically tightening happens when the economy is doing really well, so merely the prospect of some higher interest rates isn’t a problem.” The dollar index, which…

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