Australian stocks gained 0.4 percent on Monday to hold above the 4,600 mark, helped by stronger metals prices and stronger US factory data that lifted hopes for global growth. Still, shares finished off the day's highs following a round of softer-than-expected local economic data and a warning from Standard & Poor's that two rollover proposals for Greek debt would amount to a selective default.
Merger talk was the highlight as shares in Australia's Treasury Wine Estates Ltd surged as much as 11.3 percent to a record following a report that China's Bright Food Group was considering a bid. The shares ended up 8.9 percent at A$3.67. Australia's two biggest airlines, Qantas Airways and Virgin Australia, both took off after regulators grounded Tiger Airways' local operations at the weekend for at a least a week, right at the start of Australia's school-holiday season.
Qantas jumped 6.5 percent, its biggest one-day gain in more than two years, and Virgin rallied 10.5 percent to a near two-month high. Macquarie raised its rating on Virgin to outperform from neutral. The benchmark S&P/ASX 200 index gained 19.5 points to 4,621.7. The index slipped 0.4 percent on Friday, but still managed its best weekly gain in three months.
Volume was light ahead of the July 4 holiday on Wall Street, at around 75 percent of average. Australian retail sales unexpectedly fell 0.6 percent in May, the biggest drop in seven months and another sign of consumer caution that adds to the case against a hike in interest rates in the near term. "These numbers are just the latest piece of the jigsaw puzzle pointing towards a slowing domestic economy," said IG Markets analyst Ben Potter. "There's no doubt that the higher energy prices, combined with talk of further rates rises and global uncertainty has led to consumers being a lot more frugal," he said.
New Zealand's benchmark NZX 50 index rose 0.1 percent to 3,478.5. Top retailers Myer and David Jones finished weaker, giving back early gains after the retail trade data. Myer hit a new record low down 0.4 percent at A$2.58, while David Jones eased 0.3 percent. Shares of the discretionary retailers have tumbled by 15 percent in the year to June 30.
Murchison Metals resumed trading down 20 percent but closed down just 2 percent after it raised its cost estimate for the Oakajee iron ore port and rail project to A$5.43 billion. Top miners BHP Billiton and Rio Tinto were both up over 0.4 percent on higher metal prices.
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