How the day developed: Markets Live
Shanghai night field

Stronger-than-expected manufacturing data from China sparked a rally on the  Australian share market today.

The benchmark S&P/ASX 200 Index shot up 53.34 points, or 1 per cent, to 5188.3, while the broader All Ordinaries firmed 57.7 points, or 1 per cent, to 5178.

Tony Paterno, senior investment advisor at Ord Minnett, attributed the gains to the Chinese data, which showed that factory activity expanded in August for the first time in four months as domestic demand rebounded.

This was according to the final HSBC/Markit Purchasing Manager’s Index (PMI), which climbed to 50.1 in August, up sharply from July’s 47.7, and came one day after China’s official PMI rose to a 16-month high.

The data added to recent signs that the Chinese economy might not be slowing as much as feared in previous months.

‘‘I think [the PMI] is the highest it’s been in over a year now, which is a big positive,’’ Mr Paterno said. ‘‘It has lifted energy and resource stocks. The financials have been dragged up as well. They’re up about 1 per cent over all. Everything seems to up 1 per cent.’’

It also fuelled a a rally in the Australian dollar, which was trading up 0.9 per cent at 89.82 US cents at market close.

All sectors, except utilities, finished in positive territory. Resource shares, except for BHP Billiton, had a good day, with the energy and materials sub-indices rising 1.9 per cent and 0.3 per cent respectively.

BHP, which traded ex-dividend, closed down 0.4 per cent at $35.62. Rival Rio Tinto advanced 1.6 per cent to $59.22.

‘‘Had BHP not gone ex-dividend, it probably would have been up about 80 cents today,’’ Mr Paterno said.

Among the energy stocks, Origin outstripped the broader market, rising 4.5 per cent to $13.85, after it said on Friday it would cut its borrowing costs by as much as 50 basis points as it markets the Australia’s biggest syndicated loan this year.

The big banks also were up, with the financial sector rising 1 per cent. Commonwealth Bank was the biggest mover, firming 1.2 per cent to $73.68.

Bell Potter’s Charlie Aitken said despite many bank analysts believing CBA was overvalued, its strength still made sense.

‘‘In the eyes of its dominant mum and dad investors it’s ‘cheap’,’’ Mr Aitken said. ‘‘You simply can’t part them with the stock as long as the dividend is growing.’’

Billabong also joined the broader market rally, surging 14.1 per cent to 48.5 cents, after hedge fund Coastal Capital joined debt specialists circling the embattled surfwear company and said it is seeking a board spill.

Among the laggards, insurer and wealth manager, AMP lost 1 per cent to $4.69 after it announced plans to set up a funds management company in China, despite not yet receiving approval from the China Securities Regulatory Commission.

The original release of this article first appeared on the website of Shanghai Night Net.