The Australian sharemarket was higher before noon led by gains in energy and resource stocks as gold miner Newcrest and petroleum producer Santos reported strong production reports.
However, shares pulled back from earlier highs after a major bank reported that China's manufacturing had the biggest fall since March 2009.
At 11.02am, the benchmark S&P/ASX200 index was up seven points, or 0.15 per cent, at 4556.7, while the broader All Ordinaries index rose 7.7 points, or 0.17 per cent, to 4626.1.
On the ASX 24, the September share price index futures contract was four points higher at 4529 with 24,548 contracts traded.
Wall Street indices eased overnight as investors awaited a resolution to the debt-ceiling standoff in Washington, favourable company earnings reports, and progress on resolving debt issues in Europe.
But RBS Morgans private client adviser Craig Walker said the local market had defied Wall St's flat lead largely on the back of positive news from locally listed energy and resource companies.
"The market's reacted positively to a positive report from BHP yesterday, and also production report this morning from Newcrest, which has buoyed some of the stocks in that space," Mr Walker said.
"Santos today came out with a quarterly production report which was also solid so the market's happy to get stuck into energy stocks as well.
"There's also a bit of bargain hunting perhaps, you're seeing a bit of a rebound in things like News Corp."
Australian shares fell back at 10.30am after the HSBC Flash China Manufacturing PMI purchasing managers index came in at 48.9 points, the lowest in 28 months.
Santos produced eight per cent more oil and gas in the second quarter of calendar 2011, although production is down five per cent on a year to date basis.
Its shares were up three cents, or 0.22 per cent, at $13.38.
Other resource stocks were also performing well. Iluka was up 30 cents, or 1.61 per cent, at $18.95.
BHP Billiton on Wednesday reported production records for four commodities in 2010/11, including its eleventh consecutive record result for iron ore output.
BHP Billiton was up one cent at $43.45, while Rio Tinto declined 28 cents, or 0.34 per cent, to $82.27.
Newcrest Mining, meanwhile, posted a 16 per cent rise in gold production in the fourth quarter, and annual production in line with earlier guidance by the company.
Its shares were up 10 cents, or 0.25 per cent, to $41.91.
The spot price of gold in Sydney was $US1601.26 per fine ounce, up $US9.78 from yesterday's close of $US1591.48.
Banking and financial stocks were also higher.
National Australia Bank was up 33 cents, or 1.36 per cent, at $24.62, Commonwealth Bank was up 36 cents, or 0.73 per cent, at $49.91, ANZ added 22 cents, or 1.04 per cent, to $21.42, and Westpac rose 17 cents, or 0.8 per cent, to $21.33.
News Corp was another strong performer after News chief executive Rupert Murdoch left Britain following a turbulent 11-day visit dominated by the phone-hacking scandal.
Its shares were up 26 cents, or 1.71 per cent, at $15.49, while its non-voting stock was up 26 cents, or 1.76 per cent, at $15.01.
Turnover was 1.42 billion shares, worth $2.63 billion, with 506 shares trading higher, 406 lower, and 385 steady.