The benchmark S&P/ASX200 index on Tuesday finished up 26.7 points, or 0.35 per cent, to 7,664.1, while the broader All Ordinaries rose 25.4 points, or 0.32 per cent, to 7,932.0.
The gains came after the Australian Bureau of Statistics reported that retail turnover fell 0.4 per cent in March, in what ABS head of retail statistics Ben Dorber called the weakest growth on record outside of the pandemic and the introduction of GST.
Sean Langcake, head of macroeconomic forecasting for Oxford Economics Australia, said while last week's hotter-than-expected inflation data spurred concerns the Reserve Bank might raise rates again, the retail figures were further confirmation that consumer demand was restrained.
AMP economists My Bui and Diana Mousina had a similar take, saying while the futures market was pricing in a 30 per cent chance of a rate hike by November, Tuesday's data was not consistent with an economy that needed further monetary tightening.
"We see a rate rise by the RBA at next week's meeting highly unlikely," they wrote.
Eight of the ASX's 11 sectors finished higher on Tuesday, with industrials, utilities and tech lower.
The interest rate-sensitive property sector was the biggest mover, gaining 0.9 per cent as Scentre Group rose 1.0 per cent and Goodman Group added 1.6 per cent.
In the heavyweight materials sector, lithium companies shone as Tesla cleared regulatory hurdles that would enable it to sell more self-driving cars in China following Elon Musk's visit to Beijing.
Liontown rose 2.9 per cent, Pilbara added 2.5 per cent and IGO finished 7.3 per cent higher.
Elsewhere in the sector, BHP rose 0.1 per cent to $43.03 as the Big Australian and its joint venture partner Vale offered $A39 billion to settle claims over a disastrous 2015 dam collapse in Brazil that killed 19 people.
Fortescue finished up 1.5 per cent to $26.05, South32 grew 2.3 per cent at $3.59 while Rio Tinto dipped 0.4 per cent to $130.49.
Goldminers lost ground as the precious metal fell $US15 to $US2,320 an ounce. Newmont dropped 1.6 per cent while Evolution retreated 1.5 per cent.
On the flip side, the big retail banks finished higher.
Westpac rose 0.8 per cent to $25.96, CBA added 0.6 per cent to $114.54, ANZ finished 0.3 per cent higher at $28.16 and NAB climbed 0.5 per cent to $33.80 as it completed the sale of its NZ wealth management business for $400 million.
Coles dipped 0.3 per cent to $16.22 as the supermarket giant reported its third-quarter sales revenue rose 3.4 per cent in the 12 weeks to March 24 compared with a year ago.
Worley plunged 7.5 per cent to a nearly three-month low of $15.09 after major shareholder Sidara sold its 19 per cent shareholding in the professional services company.
Bapcor was in a trading halt to deliver a trading update, as the Autobarn owner disclosed that Paul Dumbrell had decided not to join the company as chief executive, just two days before he was set to start.
The Australian dollar was buying 65.23 US cents, down from 65.62 US cents at Monday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Tuesday up 26.7 Â points, or 0.35 per cent, at 7,664.1.
* The broader All Ordinaries rose 25.4 points, or 0.32 per cent, to 7,932.0.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 65.23 US cents, from 65.62 US cents at Monday's ASX close
* 102.23 Japanese yen, from 102.92 Japanese yen
* 60.95 Euro cents, from 61.16 Euro cents
* 52.05 British pence, from 52.34 pence
* 109.82 NZ cents, from 109.95 NZ cents.
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