* Shares up 0.7 pct; erases Monday's losses
* Consumer shares, banks among top performers
* Energy and material shares bottom performers
* 138 shares up, 50 down, 12 unchanged (Adds analysis, quotes, stocks on the move)
By Swati Pandey and Gyles Beckford
SYDNEY/WELLINGTON, Aug 8 (Reuters) - Australian shares rose 0.7 percent on Tuesday led by gains in banks and consumer goods companies after strong retail sales data, while New Zealand's stock market suffered its biggest single-session fall in nearly a month.
Australian retail sales for June jumped 0.7 percent, beating expectations of 0.5 percent growth. Retail sales in the previous month grew 0.4 percent. ID:nS9N0Z801R
The S&P/ASX 200 index .AXJO rose 41.1 points to 5,720.5 by 0154 GMT, breaching key psychological resistance at 5,700. The benchmark fell 0.35 percent on Monday.
The index turned a corner last month, rising for the first time since February as investors turned to high-yielding bank shares and risk appetite improved on a more upbeat U.S. economic outlook. The benchmark has risen in six of the last 10 sessions.
"We started on the front foot today with most sectors in positive territory. There is positivity going into earnings. There is optimism outside commodities," said Ben Le Brun, market analyst at OptionsXpress.
Suncorp Group SUN.AX , which kicked off the reporting season, hit a 5-1/2 month high after posting a 55.2 percent rise in full year net profit. ID:nL3N10F08R
Consumer discretionary shares rose with Harvey Norman HVN.AX up over 7 percent after a rating upgrade by Credit Suisse (SIX:CSGN). Media companies Fairfax FXJ.AX and APN APN.AX were up about 4 percent each. ID:nL3N10F18D
Major banks including National Australia Bank NAB.AX and Commonwealth Bank CBA.AX were up 0.5 to 0.9 percent. Miners BHP BHP.AX and Rio Tinto (LONDON:RIO) RIO.AX were down 1 percent and 0.4 percent respectively.
Energy-related shares also fell with Santos STO.AX down 1.8 percent and LNG LNG.AX down 4 percent.
Investors will be closely watching the Reserve Bank of Australia policy meeting outcome later in the day, when the RBA is expected to hold its cash rate at the current record-low 2.0 percent.
New Zealand's NZX50 share index .NZ50 was down 0.9 percent to 5,904.4 points after a majority stake in Contact Energy CEN.NZ went on sale, prompting investors to sell other stocks to free up funds.
Australia's Origin Energy ORG.AX said it was selling its 53 percent stake in Contact, which was on a trading halt, through a bookbuild at an underwritten price of NZ$4.65 a share, a 7 percent discount to Contact's closing price on Monday.
Energy stocks bore the brunt of the selling. Meridian Energy MEL.NZ , Genesis Energy GNE.NZ and Mighty River Power MRP.NZ were all down around 3 percent. The energy utilities sub-index fell 2 percent.
Other leading stocks were also sold as investors booked profits, notably telecommunications company Spark SPK.NZ , down 3.2 percent.