Aust stocks close stronger

The Australian sharemarket has closed stronger amid broad-based buying and an upbeat read on the Chinese manufacturing sector.

At the 4.15pm (AEST) official market close, the benchmark S&P/ASX200 index gained 33.8 points, or 0.62%, to 5,453.3 points, while the broader All Ordinaries index rose 31.1 points, or 0.58%, to 5,432.7 points.

The HSBC China flash purchasing managers' index showed the nation's manufacturing sector expanded for the first time in six months in June, lifting to 50.8 points from 49.4 in May.

CMC Markets chief market strategist Michael McCarthy said the stronger than expected manufacturing read boosted the positive outlook, although there was buying across the boards.

"With no further China data until Friday’s industrial profit numbers, further short covering from China bears may see more gains for Australian shares this week," he said.

Materials stood out as the iron ore price lifted back above $US92 after last week slipping to an almost two-year low, Mr McCarthy said.

"The current market punching bag, consumer stocks, got up off the floor, and banks and telcos joined in the rally," he said.

"However volumes are below average and a note of caution was sounded by the continued rise of the Volatility Index from last week’s record lows."