Stocks are expected to rise today after European stock markets surged overnight; a rebound after the actions of Vladimir Putin have spooked share players as the price of oil, wheat and other commodities have gone through the roof.

And it comes as our economy is being buffeted by the cost of the floods, which is set to see insurance claims head over $3bn. This is money that will eventually flow back into the economy and will provide demand to help economic growth, but, in the short term, the disaster dramas will hurt confidence and the local economies that have to deal with the devastation.

All this makes an early end to the Russian-Ukraine war essential for a sustained rebound of the stock market, which in turn will add to the economic positivity that would follow with an end to military manoeuvres in Europe.

The surprise twin actions overnight of OPEC agreeing to add to oil production and the news that the Ukraine leadership is considering simply being a neutral country has raised confidence levels on stock markets and our market is tipped to open up 43 points today.

Our gains won’t be as spectacular as those seen in Europe because we have seen our commodity and energy companies skyrocket since the war started, but the rise yesterday of the All Ords, which was up 78 points (or 1.09%) was a sign that some positives were developing for share prices.

The chief reason why stock markets have not plummeted with this war threat is because the overall consensus is that a solution, other than the West actually going to war, was always uppermost in the minds of big investing influencers. War with Russia chopping off gas to Europe would have been an economic dislocation of an Armageddon kind and that would have really spooked stock markets.

German DAX

The German DAX stock market index is only down 10.55% in a month, which shows that there were major concerns about the war, but a 7% plus rise overnight for the Index shows how significant these developments are.

Over the same time, our market was down only 3.23%, so I don’t expect our gains to be as great today, but if the war can be stopped in the not-too-distant future, then the global economic rebound will ensue, which should prove very positive for our stock market.

The combined surge in demand from post-war confidence boosts, lower oil and commodity prices, the rebound in the global economy and the local stimulus from governments having to shell out to make up for the flood damages, will be a big plus for stocks.

The declaration of a national emergency because of the floods will unleash millions in government spending, which will be turbo-charged because of the upcoming election.

Up to now, $385.2 million in disaster payments have already been made to about 331,000 people, and the Insurance Council of Australia says nearly 108,000 claims had been lodged across the two states as of Wednesday evening, and these claims are set to top $3bn.

The bottom line is after our poor, fellow Australians have been helped and have learnt how to deal with their shocking bad luck, $3bn worth of spending will follow out of the claims that will create sales for businesses and jobs for workers — and stock prices will rise.

The Government’s budget deficit will also rise, and one day taxpayers will have to pay the price of helping us out of these rough times, but that’s the price of trying to beat a pandemic and a once in a 100-year flood.

Of course, I’m looking at the best-case scenarios of two tragic events i.e. the war and the floods, but this overnight surge in stocks shows us what will happen when the short-term shock of unwanted events, which hit and hurt share prices, eventually gets resolved.

It might be too early to bet on a stock price resurgence but we have been given a sneak preview of what will happen to share prices when the war is ended and flood damages are compensated.