Australia shares give ground; Spotless higher

SYDNEY: Australian shares retreated 0.3 percent on Monday, with a weak showing by local retailers and worries about bond sales by Italy and Spain this week overshadowing solid US jobs data.

Traders said local investors would start focusing on the European debt situation in earnest this week, with two big auctions coming up.

"If we didn't have Europe this market would be rallying on the back of the US numbers," said Burrell & Co dealer Jamie Elgar.

Markets were braced for debt sales from Spain and Italy on Thursday and Friday, seen as a major test of investor willingness to plough more money into the region's troubled countries following recent steps to address their debt problems.

Australian economic data were gloomy, with November retail sales flat and falling short of forecasts for a rise of 0.3 percent despite the central bank's first rate cut this cycle.

Retail stocks were mixed after the data, with electricals retailer Harvey Norman down 1.3 percent and department store Myer up 0.3 percent.

Shares in Super Retail Group, which includes Rebel Sports and Ray's Outdoors, saw shares rise 2.2 percent to A$5.58 after its chief said the company had solid trading over the holiday period.

The benchmark S&P/ASX 200 index eased 13.3 points to to 4,095.2 at 0038 GMT. The benchmark fell 0.8 percent on Friday but ended the first week of the new year up 1.2 percent.

New Zealand's benchmark NZX 50 index edged up 0.05 percent to 3,255.0.

STOCKS ON THE MOVE

Shares in cleaning services firm Spotless Group rose 2.6 percent to A$2.39, after the firm said it would recommend a higher offer from its private equity suitor Pacific Equity Partners, if PEP raised its offer to at least A$2.80 per share or A$743 million ($760 million).

Shares in global miner Rio Tinto eased 0.6 percent. The company said it would compulsorily acquire the remaining shares in Canadian uranium company Hathor Exploration, after lifting its stake to nearly 94 per cent.

Copyright Reuters, 2011