The S&P/ASX 200 finished the day at 5210.4, up by 0.2 per cent or 12.5 points while the All Ordinaries closed at 5241.4 points, up 13 per cent or 0.25 points.

Trading got off to a positive start on Thursday with the S&P/ASX 200 up 1 per cent by noon, before a weaker-than-expected start to trade on Chinese mainland sharemarkets quickly deflated the market.

The Shanghai Composite Index gained through the day to stand 3.8 per cent higher in late trade, but the moves were significantly less ambitious than those seen across US, European and Australian markets this week.

"The better-than-expected [China] PMI numbers and the range of new policies announced, from easing property downpayments to lowering the tax rate on new car purchases, helped boost [Hong Kong listed] H-shares 10.5 per cent," IG markets analysts Angus Nicholson said.

"This gave rise to high expectations that the Chinese markets would rally as they played catch up to the rest of the region. This did not look to be the case in the first half of the mainland Chinese trading session, and it disappointed markets in the region."

Rio Tinto finished the day 1.9 per cent higher at $53.18 and BHP Billiton at $25 up 3 per cent, as the sentiment around commodities stocks continued to improve, buoying mining and energy names.

Among the biggest gainers of the day were fellow resource companies Fortescue Metals Group, up 5.2 per cent to close $2.21, and South32, which jumped 8 per cent to $1.55. BlueScope Steel added 3.2 per cent to $3.82 as Chinese futures for commodities soared.

Resources stocks have fallen for months as commodity prices plunge to the point that many are now good value or even relatively cheap, UBS equity analyst David Cassidy said in an analysis published on Thursday.

"As a general statement it was interesting to see resource and resource-related stocks heavily represented in our cheapest 10 stocks on a price-to-book basis," Mr Cassidy said.

Towards the top of UBS's best valued stocks was Santos, which was also one of the biggest gainers of the day, rising 8.5 per cent to $5.50. Fellow energy company Origin Energy continued to rise on Thursday after leaping more than 10 per cent on Wednesday to finish up 5.4 per cent at $6.43.

While BHP Billiton was the biggest contributor to the market's gains, it was closely followed by the ANZ Banking Group, who led the financial sector higher.

ANZ finished up 0.8 per cent at $27.93, the Commonwealth Bank closed up 0.5 per cent at $75.37, while National Australia Bank added 0.4 per cent to $31.30 and Westpac Banking Corporation could only manage a 0.1 per cent gain to $30.54.

The much smaller Bank of Queensland also fared well, up 7.3 per cent $12.46 after reporting strong annual earnings growth.

The biggest losses of the day were sustained by gold mining stocks that lost some of the gains made last week as the gold price soared. Evolution Mining sustained the most significant decline, losing 4.4 per cent to close at $1.31 while Newcrest Mining lost 4 per cent to finish at $14.

Other significant losses included Sirtex Medical, down 4 per cent to $31.38; law firm Slater & Gordon down 3 per cent to $2.95 and Qantas Airways, down 3.2 per cent to $3.60.