The Australian share market has surged today, on news that the ASX (ASX) has entered into an agreement to merge with the Singapore Exchange (SGX). At lunchtime in the East, the All Ordinaries Index (XAO) is up 57pts or 1.2pct to 4776.6.

Shares in the ASX resumed trade just after 1pm AEDT, rising 25pct to $43.59. The merger will see SGX pay $22 for all ASX shares and offer 3.5 of their own per each ASX share, valuing the ASX at $8.4 billion. The merger still requires approval from the Australian Securities and Investment Commission, Treasurer Wayne Swan and the Monetary Authority of Singapore.

The potential deal has seen shares in share registry Computershare (CPU) rise 4.8pct to $10.33 while Macquarie Group (MQG) which is tipped to broker the deal, is up 3.5pct to $34.78.

Other financial stocks are also trading higher, with the sector firmer by 2pct. Shares in the NAB (NAB) have risen 2.5pct to $25.09.

Rio Tinto (RIO) shares are firmer by 1.7pct to $83.45 while in the energy sector Santos (STO) and Oilsearch (OSH) have both gained 3pct today.

The CEO of Sydney Airport Russell Balding has today announced he will step down from the job in early 2011. MAP Group (MAP), the owner of Sydney Airport, is firmer by 1.7pct to $3.07.

Business inflation data, or the producer price index, rose a higher than expected 1.3pct in the September quarter. The surprise lift has seen the Aussie dollar jump to US99.11c as money markets increased the likelihood of a November rate hike.