Promising economic data out of China saw Australian shares stage a turnaround on Tuesday, closing higher despite significant falls earlier in the session. The benchmark S&P/ASX200 index was up 22.9 points, or 0.5 per cent, at 4,585, while the broader All Ordinaries index was up 16.2 points, or 0.35 per cent, at 4,651.1. Each of the indices had opened more than 0.6 per cent lower after the long weekend and were at similar levels at noon.

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On the ASX 24, the June share price index futures contract was 52 points higher at 4,586 points, with 130,379 contracts traded. The release of key economic data from China shortly after noon showed the country was far from slowing, despite measures to contain growth. China's consumer price index rose 5.5 per cent year on year in May, up from 5.3 per cent in April. Other data showed industrial output rose 13.3 per cent from a year earlier in May, fixed asset investment for the January-May period rose 25.8 per cent on the previous corresponding period, and retail sales rose 16.9 per cent year on year in May.

Financial stocks led the local market's turnaround, followed by the industrial sector and some consumer stocks. Among the banks, Commonwealth Bank of Australia gained 86 cents to $50.45, ANZ added 30 cents to $21.83, NAB rose 31 cents to $24.48 and Westpac was 19 cents higher at $22.04. Insurance Australia Group on Tuesday said it was too early to quantify the financial impact of this week's New Zealand earthquakes, and outlined plans for expansion in Asia. Its shares edged up two cents to $3.58, while rival Suncorp added 19 cents, or 2.34 per cent, to $8.30. In industrials, transporter Toll Holdings led the way, up 13 cents, or 2.55 per cent, to $5.22, and Brambles added 14 cents to $7.34. Foster's Group was another strong performer, with the brewer up 13 cents, or 2.88 per cent, to $4.65. The mining and resources sectors finished lower but well off earlier lows. BHP Billiton lost 10 cents to $43.05 and Rio Tinto gained one cent to $80.21. The spot price of gold in Sydney at was $1,522.30 per ounce, down $20.68 from Friday's close of $1,542.98 per ounce. Preliminary national turnover was 2.6 billion securities worth $4.9 billion, with 405 stocks up, 724 down and 409 were unchanged.

The Australian dollar inched higher Tuesday, with market participants shrugging off some concerning economic reports locally and following other markets higher on the back of data out of China. In the first full session after a three day weekend in Australia, the country's currency met a set of weak data early in the session as Australian May business confidence and April lending data both disappointed. The currency was little changed following those local reports, however, as traders were heavily focused on China instead. That China data helped buoy risk assets generally including the Australian dollar shortly after the Australian data. China's inflation data and other figures showed that the world's second largest economy and Australia's largest trading partner continues to grow at a steady pace. A development that calmed some fears of a potential high inflation/low growth scenario. The Australian dollar was trading at $1.0643, up from $1.0600 late Friday. Against the Japanese yen, the Australian dollar was at 85.455, up from 84.925.

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