Asian stocks extend rally

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    TOKYO/NEW YORK- Asian stocks extended their rebound from a two-month low on Thursday after a report on US consumer prices calmed concerns about inflation and lifted the Dow Jones Industrial Average to a record close.

    An index of regional stocks excluding Japan rose 0.7 percent, led by a 1.7 percent surge in South Korea’s Kospi, and was on track for its first three-day advance in three weeks.

    China’s Shanghai Composite rallied 1.6 percent, while Japan’s Nikkei 225 gained 0.5 percent.

    “The reflation trade is back on,” said Michael McCarthy, chief markets strategist at CMC Markets.

    “We saw bonds and stocks rallying together and a slight easing in the US dollar, which also indicates improving sentiment.”

    The US Labor Department said its consumer price index rose 0.4 percent in February, in line with expectations, after a 0.3 percent increase in January. Core CPI, which excludes volatile food and energy components, edged up 0.1 percent, just shy of the 0.2 percent estimate.

    While analysts largely expect a hike in inflation as vaccine rollouts lead to a reopening of the economy, worries persist that additional stimulus in the form of a $1.9 trillion coronavirus relief package set to be signed by US President Joe Biden could overheat the economy.

    The House of Representatives gave final approval on Wednesday to the bill, one of the largest economic stimulus measures in US history.