Australian Stock Market Report – Midday 1/29/2013

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By Juliette Saly, CommSec Market Analyst | January 29, 2013 1:58 PM EST

MIDDAY REPORT
(12.30pm AEDT)

The Australian share market continues to trade at 20 month highs, resuming trade after the Australia Day long weekend on a positive note. Investors are focusing on strong gains on offshore markets at the end of last week, rather than the subdued finish during Monday's session on Wall Street. In early trade, the All Ordinaries Index (XAO) rose above 4900 points for the first time since early May 2011, after the Dow Jones Index added 1.8pct over the course of last week.

At lunchtime in the East, the XAO is firmer by 38.4pts or 0.8pct to 4897.3.

Insurer stocks are in focus in the wake of the Queensland cyclone and floods which have wreaked havoc across parts of Australia's East Coast. The Insurance Council of Australia says the losses are currently holding around $43 million, and estimates they could top $50 million. However this should be easily manageable for the insurers. IAG (IAG) has a natural peril allowance of $640 million for the financial year, while Suncorp Group (SUN) has a natural peril allowance of $520 million. Suncorp has received 4,500 claims from the wet weather so far, prompting a broker concern on the insurers. Shares in IAG are down 2.2pct to $4.82 while QBE (QBE) is off 2.6pct to $11.29 and SUN is down 2.5pct to $10.64.

In other news, Leighton Holdings (LEI) has commenced work on the world's largest gaming hub for Wynn resorts in Macau, with the first component of work worth $222 million. LEI shares are firmer by 0.7pct in the early session to $20.15.

The NAB Business survey was released today, showing business confidence rebounded in December following a rate cut and positive developments in the US and China.

Business confidence rose 12pts to an index reading of plus 3.

The Australian dollar is worth US104.39c, £0.6649 and €77.63c.

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