The Australian stock market has begun with a heady, flat start this morning as the country watches the voting caucus among Labor Party leaders. Although analysts expect Julia Gillard to win, Australians and observers are still disappointed at the cracks in the leadership foundation of the party and confidence among voters will be difficult to rein.

Analysts have cast a wager on whether the index could break the 4300 level, which it had struggled to break for a while.

CMC Markets chief analyst Ric Spooner says "in technical terms, the index managed to limp through the 200 day moving average late last week but has yet to make a convincing move through this resistance level. The 200 day moving average currently stands at 4288. A move 40 to 50 points above this level would improve the near term possibility of a rally to the 4450/4550 resistance area."

IG Markets strategist Stan Shamu says "the downside seems to have been amplified by dividends coming out of the index this morning. BHP Billiton goes ex-dividend for 51 cents this morning."

He notes that "with a reasonable night for commodities on Friday, we might see some upside in the resource stocks, particularly for the energy plays."

The profits reporting season is winding down this week. On the other hand, investors will be provided with a number of economic statistics which will help shape views on current and future economic growth.

Mr Spooner adds that "amongst the most significant of these will be the 4th quarter capital expenditure figures. This will follow a very strong 3rd quarter figure and assumes added importance given the heavy reliance of the Australian growth narrative on business investment."

"Other potentially significant releases will be the international PMI figures on Friday and Australia' retail sales and building approvals which will provide an early insight into 2012 activity levels. Investors will be looking for the January retail sales figures and the outlook comments from Woolworths and Harvey Norman to provide further evidence this week on the January sales period and the consumer activity prior to the oil price increase," he notes.

The rising oil prices will further impact on the consumer and business sentiments this week.