Stocks stumble as investors' nerves show ahead of US inflation data

SINGAPORE : Stocks were struggling to advance in Asia and the dollar was firm on Wednesday ahead of U.S. consumer price data that could damage hopes for interest rate cuts later this year if inflation fails to show much of a decline.

April U.S. consumer price data is due at 1230 GMT and economists expect the headline CPI to hold steady at an annual 5 per cent and core CPI to moderate very slightly to 5.5 per cent, though anything stickier could confound bets interest rates will fall. Treasuries were broadly steady overnight, though debt-ceiling brinkmanship is warping the bills market as investors avoid bills maturing early in June.

Hong Kong's Hang Seng fell 0.4 per cent. The Shanghai Composite dropped 0.8 per cent and the yuan edged lower. An apparent crackdown on due diligence firms is also unnerving investors. The common currency was pinned below $1.10 on Wednesday. The dollar was also firm at 135.14 yen and has lifted slightly from recent lows on the Aussie, kiwi and sterling.

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