Positive reports reverse early losses

The market lost ground in early trade due to negative leads from Wall Street (down 0.13 per cent) and London (down 0.26 per cent), with crude oil dipping US11? to $US92.76 a barrel.

But the benchmark S&P/ASX 200 Index rose 8.9 points, or 0.2 per cent, to 4292.2 as the profit reporting season rolled on.

Analysts said individual stocks, rather than sectors, were driving the market higher as investors focused on positive company earnings, and as fund managers began to rotate out of defensive yield plays.

"One of the interesting developments is that some of the market darlings of the last couple of months, such as Telstra and CSL, which have been sold off about 8 per cent [in recent weeks] . . . you're actually seeing a reasonable bounce in those," said Ord Minnett analyst Craig Turton.

"They're both up about 2 per cent. So I guess now you'll start to see other investors, particularly Telstra retail investors, start to buy a little bit of those now."

The latest National Australia Bank monthly business survey, released yesterday, showed business confidence surging higher in July, after falling over the previous two months.

NAB's business confidence index rose to 4 in July, from minus 3 in June, its biggest jump in 10 months. But business conditions deteriorated, easing slightly to minus 3 last month from minus 1 in June.

"It appears recent talks in Europe have provided some relief to financial markets, which is resonating through to an improved outlook for global demand," said NAB chief economist Alan Oster. "Sentiment is also likely to have picked up given [the] carbon tax 'hurdle' has been passed."

Late in the day's trade, economic data from Europe showed German gross domestic product growing slightly better than expected, rising 0.3 per cent from the second quarter. Economists had predicted an increase of 0.2 per cent.

NAB fell 35? to $24.70, despite reporting a $1.2 billion profit in the three months to June. With AGENCIES