Aust stocks buoyed by US confidence

The Australian stock market retreated slightly to sit 1.3% higher at noon after Wall Street rebounded to start the month on a high note, as investors braced for the central bank's call on the cash rate due Tuesday afternoon.

After posting losses for June, United States stocks were buoyed overnight in the first trading session for July by a promising duo of local economic reports.

At 1205 AEST, the local benchmark S&P/ASX200 index rose 1.29% to 4771.1 points, while the broader All Ordinaries index was 1.29% higher at 4750 points.

Materials were stronger, with the major miners leading the market.

Rio Tinto gained 1.68% to $52.60, while BHP Billiton rose 1.97% to $31.55.

Fortescue Metals jumped 3.9% to $3.065.

Whitehaven Coal added 1.28% to $2.38, while Newcrest lifted 5.9% to $10.59.

Financial stocks pared some of yesterday’s steep losses.

Commonwealth Bank lifted 0.7% $68.005, while ANZ Banking Group rose 0.7% to $28.015.

National Australia Bank fell 0.36% to $28.865, while Westpac Banking Corporation gained 0.02% to $27.975.

Investment bank Macquarie Group rose 0.74% to $40.80.

In the insurance sector, QBE added 2.52% to $15.685, Insurance Australia Group increased 2.97% to $5.54 and Suncorp lifted 0.09% to $11.73.

In the previous session, Australian stocks started the new financial year on a negative note due to investor concerns about the world's second largest economy, China.

More than $27.5 billion was wiped off the value of the market after manufacturing data released in China showed activity barely growing, down to 50.1 points from 50.8 in May.

The benchmark S&P/ASX200 index was down 92.3 points, or 1.92%, at 4,710.3 points, while the broader All Ordinaries index was down 85.7 points, or 1.79%, to 4,689.7 points.