Stocks stumble on data and debt fears

The benchmark S&P/ASX 200 Index was down

35.9 points, or 0.78 per cent, at 4537.4. while the broader All Ordinaries Index dropped 33.7 points, or 0.73 per cent, to 4,612.6.

On the ASX 24, the September share price index futures contract fell 30 points to 4512 points, on volume of 27,963 contracts.

RBS Morgans private client adviser Bill Bishop said the release of unexpectedly high inflation data had dented the market.

The consumer price index rose 0.9 per cent in the June quarter, taking the annual rate of inflation to 3.6 per cent, from 3.3 per cent.

"The CPI is now outside the RBA's target band

[of 2-3 per cent]," Mr Bishop said.

"It's up 0.9 per cent, and annualised it is 3.6 per cent . . . it introduces a whole new ball game. People see all this bad news from overseas and they're not sure what's happening here."

He said intensifying concerns about the US debt-ceiling deadlock had also weighed on the market.

The White House and its divided Republican foes have failed to break an impasse that could see it default on its debt.

Politicians in Washington now have less than a week before the US hits the August 2 deadline to raise the $US14.3 trillion ($A13.1 trillion) debt ceiling.

In local trade, materials and resource stocks had a rough day, with Mirabela Nickel the worst performer in the top 200 stocks.

The Perth-based miner's shares dropped 17?, or 8 per cent, to $1.95, despite the company boosting nickel production at its flagship Brazilian mine by 20 per cent in the June quarter.

BHP Billiton finished down 52? at $43 while Rio Tinto was down 40? at $82.59.

The spot price of gold in Sydney closed at $US1624.45 an ounce, up $US10.45. Newcrest Mining gained 32?, or 0.8 per cent, to $40.50.

Banks and financials were down, with Westpac the worst hit. It fell 34?, or 1.6 per cent, to $21.02. NAB was down 37? at $24.45, ANZ fell 27? to $21.28 and CBA slipped 40? to $49.82.

Telstra eased 1? lower, or 0.33 per cent, to $3.02.

National turnover was

2.1 billion shares, worth

$5.2 billion, with 426 shares up, 632 down, and 381 steady.

The dollar hit a 28-year high after stronger than expected inflation figures raised expectations of an interest rate rise. At the close at was at $US1.1055, adding more than US1? from $US1.0931 on Tuesday.