The ASX recovered early losses to end the day narrowly in the black, holding on to last week's outsized gains despite disappointing retail figures.

The benchmark S&P/ASX 200 Index traded briefly above Friday's close in the morning, swung sharply lower then regained lost ground just before the close, ending up 0.1 per cent, or 8 points, to 5872.7. The broader All Ordinaries was also up 0.1 per cent, or 6 points, to 5909.7

Australia Bureau of Statistics retail spending figures for February were weaker than economists had been expecting following a strong January. The Australian dollar lost about US0.4¢ following the result and briefly dipped below US76¢ before recovering to trade slightly above that level in late Monday trade.

Sentiment "definitely shifted after the release of the retail sales numbers," said Gary Huxtable, client adviser at Atlantic Pacific Securities, with all sectors briefly in the red. 

But as trade wound up, surging performance in defensive sectors like healthcare and communications, as well as the big banks, pushed the market higher. 

"It is a big data week and it will be interesting how things will unfold after what has been an eerily calm start for global equity markets in 2017," Mr Huxtable said.

"We're still trading above previous yearly highs and a sense of profit-taking is to be expected after a solid first quarter."

The big four banks added between 0.3 to 0.6 per cent, pulling the financials subindex up 0.2 per cent, a performance which on its own almost recouped the losses of all other sectors. 

In healthcare, CSL and Cochlear rose strongly, up 0.7 and 0.6 per cent, respectively. Ramsay Health Care moved the other way, down 0.7 per cent, while hospitals operator Healthscope slumped 4 per cent after announcing a new CEO.

Telstra rose 0.9 per cent and Spark New Zealand surged 0.9 per cent.

Weighing on the index was the performance of the materials sector. Weaker metals prices leading into Monday's open led to Rio Tinto shedding 0.7 per cent, BHP Billiton closing down 0.2 per cent, and Fortescue Metals dropping 0.5 per cent. 

Not all miners were in the red. The day's biggest gainer was Whitehaven Coal, which rose 3.7 per cent. Its rivals in Queensland have been hit by cyclone-related disruptions, making Whitehaven one of the few unaffected coal miners. South32 added 1.1 per cent for the same reason. 

Spotless shares fell 0.5 per cent after a major shareholder said it would reject a takeover from Downer EDI. Spotless said it was "exploring alternatives", having received interest from "several other parties".

Stock watch: Bega Cheese

Shares in Australian dairy company Bega Cheese lost 1.6 per cent to $6.23 on Monday. But they're still trading far higher than at the start of the year. In fact, Bega Cheese is the best-performing stock on the ASX 200 so far this year, rising 47 per cent. Key to the rally was its $460 million purchase of the iconic Vegemite spread from Mondelez in late January. That was followed by a sale of one of its plants to Mead Johnson Nutrition for $200 million - an "extraordinary deal" according to brokerage Baillieu Holst. The stock isn't widely covered, but two out of three analysts listed on Bloomberg as covering it have it as a hold - perhaps unsurprisingly given it's rapid rise. 

Retail sales

Retail sales fell 0.1 per cent in February, surprising economists who had been tipping a 0.3 per cent rise following January's 0.4 per cent growth.  Furniture, floor covering, housewares and textiles sales fell 2.5 per cent in February, while department store sales were up 0.8 per cent. CBA's Michael Workman said "the main issue preventing firmer retail spending growth is the uncertainty over household income growth. National nominal household earnings (wages plus jobs) growth is running at around the inflation rate of 1.5 per cent. So there is no real growth in spending power for households."

House prices

Home prices jumped again in March to propel annual growth to the fastest in almost seven years. CoreLogic said its index of home prices for the combined capital cities climbed 1.4 per cent in March, matching the previous month's gain. Annual growth in overall prices accelerated to 12.9 per cent, from 11.7 per cent, surpassing the previous peak touched in 2015 and the fastest pace since May 2010. Home prices in Sydney kept up their blistering run with a rise of 1.4 per cent in March, taking annual growth to 18.9 per cent.

Manufacturing PMI

Factory activity has enjoyed its sixth month in a row of expansion although the pace of growth eased in March as soaring energy prices added to manufacturers' costs. The Australian Industry Group's performance of manufacturing index (PMI) fell by 1.8 points to a still strong 57.5 in March, staying above the level of 50 points which indicates an expansion in activity. The Ai Group says rising sales, production, employment and exports had boosted overall factory activity. The food and beverages, machinery and equipment, metals products, and non- metallic minerals sectors grew strongly.

Equities surge

US stocks enjoyed their strongest start to the year since 2015, but emerging markets have truly outperformed. The MSCI emerging market index rose 11 per cent over the past three months, thanks to powerful performances from sharemarkets in Brazil, India, Taiwan and South Korea. Chinese mainland stocks have done less well, but Hong Kong's Hang Seng is one of the best. Not all bourses rose: Russia's MICEX is off by more than 10 per cent in 2017. The S&P 500 is up 5.5 per cent while the tech-heavy Nasdaq index jumped 10 per cent.