The Australian share market was boosted today by a strong close on Wall Street overnight as oil prices fell by more than $US5 a barrel.

At midday the S&P/ASX200 index was up 76 points, while the All Ordinaries added 60.

US shares rallied on Tuesday as a sharp drop in oil prices eased economic fears, and the Federal Reserve indicated that it was likely to extend emergency loans to ailing investment firms.

The Dow Jones Industrial Average closed up 152 points, while the Nasdaq composite surged 51.

In Asian trading Japan’s Nikkei was up 237 points at midday today, while Hong Kong’s Hang Seng added 520.

Back on the ASX, Insurance Australia Group said today that it is to scale back its struggling UK operations, at a cost of $350 million, as part of group-wide restructuring.

IAG also said it would cut its 2008 dividend payout ratio by 50 to 70 per cent of earnings. However IAG, which in May rebuffed QBE’s $8.7 billion takeover bid, said the moves were necessary to improve its long-term performance, and that it expected insurance margins to improve to over ten per cent in 2009. Shareholders reacted cautiously to the news, with IAG trading up a cent at midday.

In other news energy group AGL said this morning that it had acquired a 9.99 per cent stake in geothermal explorer Torrens Energy, in a bid to commercialise base load geothermal projects.

AGL said the $2.2 million acquisition would complement the company’s existing renewable energy projects, and could play an important role in meeting future renewable energy obligations. Torrens Energy, which listed on the ASX in 2007 holds exploration tenements in South Australia.

Finally, consumer confidence plunged to a 16-year low in July, according to the latest figures published by the Westpac-Melbourne Institute index of consumer sentiment.

The index dropped 5.7 points this month to hit its lowest level since 1992, as record fuel prices, higher interest rates and a sliding stock market have all had a negative impact on domestic wealth. Westpac chief economist Bill Evans said the surprisingly large fall in the index pointed towards a period of very weak economic activity.

In individual share price movements on the ASX earlier today resource stocks were mixed at midday. BHP Billiton was up 46 cents, Fortescue Metals fell 20, Rio Tinto added 71 cents while Woodside Petroleum lost 68.

However financial stocks made strong gains this morning; ANZ added 47 cents, Commonwealth Bank gained 87, National Australia Bank put on a dollar, while Westpac rose by 32 cents.

Other blue chips also made gains. AMP was up four cents at midday, News Corp added 46, Telstra gained 12 cents, while Woolworths put on 36 cents.