The share market has closed slightly higher in thin trade after wavering through the day, boosted by private figures showing Chinese manufacturing output gathered pace in July.
The All Ordinaries index edged two points higher to finish at 4,161 and the ASX 200 added four points to 4,133.
The market wavered through the morning amid gloom about Europe after Spain's borrowing costs hit euro-era highs.
A move by ratings agency Moody's to put the AAA-rated eurozone economies Germany, the Netherlands and Luxembourg on negative watch did little to help sentiment.
But at lunchtime, trade edged higher after a private survey showed Chinese manufacturing output grew at its fastest pace in nine months in July.
The HSBC Flash China manufacturing index rose to 49.5 in July from 48.2 in June.
That is close to the 50 level that indicates expansion in the sector.
The major miners gained on the China optimism after struggling early in the session.
BHP Billiton finished 1.2 per cent higher at $30.93, while Rio Tinto added 0.5 per cent to $51.76.
Billabong shares surged 19.5 per cent higher to close at $1.32 after private equity firm for the troubled surfwear retailer.
The offer is valued at $1.45 cents a share.
TPG says so far shareholders with 12.5 per cent of the company have agreed to sell their stakes.
Back in February, Billabong rejected an offer from TPG of $3.30 cents a share.
Elsewhere in the retail sector results were mixed, with Myer adding 1.2 per cent, but David Jones fell back 2.6 per cent to $2.29.
The big four banks were also mixed with Westpac adding 0.3 per cent and Commonwealth Bank adding four cents.
NAB and ANZ both edged slightly lower.
Telstra dropped 0.7 per cent to $3.86.
At 5:25pm (AEST) the Australian dollar was buying 103.01 US cents, 84.98 euro cents, 66.41 British pence and 80.67 Japanese yen.
West Texas crude oil was lower at $US88 a barrel and Tapis crude was down to $US107.30 a barrel.
Spot gold was steady at $US1,577 an ounce.