Australia’s summer period is increasingly likely to be affected by storms and flooding, with the Australian Bureau of Meteorology (BOM) activating a La Niña alert on Tuesday.
The BOM shifted from La Niña watch to alert and said there was a 70% chance of the wetter-than-average weather pattern forming in the coming months.
Six of the seven climate models the BOM monitor now indicate that Australia will reach La Niña status by November.
La Niña would be likely to produce more tropical cyclones during the Australian cyclone season from November to April.
The conditions are expected to bring increased rainfall and storms though spring and summer in northern and eastern Australia.
Agricultural product stocks might benefit from the rainfall, but not from damaging storms.
Insurance stocks such as QBE Insurance ASX: QBE, Suncorp ASX:SUN, and Insurance Australia Group ASX: IAG might be worth watching, with insurers and brokers being urged to work closely with customers to evaluate cover.
BOM’s severe weather outlook is warning of an average to slightly above average risk of tropical cyclones this season and above average risk of flooding.
Disclaimer: CMC Markets is an order execution-only service. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.