Stocks lose ground as floods worsen

The S&P/ASX 200 Index closed down 1.6 points at 4710.7.

Several resources stocks and companies exposed to the flooding were the worst performers as the disaster spread to Brisbane.

IG Markets strategist Ben Potter said Queensland exports, most notably coal, were among the hardest hit. "Nobody knows if these mines will be out of action for two weeks or six months," he said.

"We're talking about more than 40 per cent of global seaborne coal trade, that's a huge disruption to an already tight market."

Rail freighter QR National shed 9?, or 3.3 per cent, to $2.68.

The resource sector was down 0.4 per cent. BHP Billiton put on 16? to $44.61 and Rio Tinto lost 24? to $84.12. Among others, OZ Minerals lost 6.5? to $1.635 and Fortescue dipped 6? to $6.49.

Brisbane-based insurer Suncorp Group lost 31?, or 3.7 per cent, to $8.19. It says it is too early to assess its total financial exposure to the disaster.

Insurance Australia Group, which owns the NRMA Insurance and CGU units, dropped 5? to $3.84, while QBE went against the trend, putting on 14? to $18.14.

But Platypus Asset Management portfolio manager Prasad Patkar said the floods were not the only factor dampening the market. The Australian sharemarket had underperformed for the past three months, he said.

"We have been through quite a bit in the past year. We have had a change of prime ministership and then the elections," Mr Patkar said.

He said the high Australian dollar might also be denting the market, with the "possibility of offshore investors selling our market and monetising gains because they perceive some downturn in currency".

"The domestic economy is not as buoyant as people would have thought three or four months ago. The Reserve Bank may have overdone it a bit in terms of their tightening."