Surprise retail spending data winds stocks

The S&P/ASX 200 Index closed 19.5 points, or

0.42 per cent higher, at 4610.7.

By contrast, Wall Street indices gained at least

1.36 per cent on Friday, while most of Asia's major indices were 0.7 per cent higher yesterday.

Australian Stock Report's head of research, Geoff Saffer, said weak local economic data was to blame for the underperformance.

"The retail spending figures were quite a surprise to the market," he said. "Since then, the market has struggled and the Aussie dollar has pulled back a touch as well."

The Bureau of Statistics reported that retail spending had dropped 0.6 per cent in May, well below market expectations of a 0.3 per cent rise.

The figures led the market to believe that the Reserve Bank was less likely than previously thought to raise the cash rate when it met today, Mr Saffer said.

Residential building approvals figures for May were also weak, and a rebound in job advertisements numbers in June were largely ignored, he said.

Retail stocks bore the brunt of investor concern.

Woolworths lost 5? to $27.72, department store owner Myer was off 1? at $2.58 and Harvey Norman was down 2?, or 0.8 per cent, at $2.42.

BHP Billiton firmed 25?, or 0.6 per cent, to $44.02 and Rio Tinto rose 32?, or 0.4 per cent, to $83.15.

Murchison Metals fell 1.5?, or 2 per cent, to 75? after the company said

costs at the embattled Oakajee port and rail project had blown out. The stock traded as low as 60.5?.

The big banks were the market laggards, closing as much as 0.2 per cent lower.

Commonwealth Bank was the exception, with Australia's largest lender rising 14?, or 0.3 per cent, to $52.06.

Telstra eased 1? to $2.91.

The grounding of Tiger Airways was good news for its listed competitors. Virgin Blue gained 3? to 31.5? and Qantas soared 12? to $1.97.

Smaller stocks that did badly in 2010-11 did well on Monday as investors repurchased them after selling them last week for tax purposes, Mr Saffer said.

Karoon Gas Australia was one of them, gaining 34?, or 6.4 per cent, to $5.62.

Trading was comparatively light because the US market would be closed overnight for the Independence Day public holiday.