Market report || TA-25 ends higher on new governor, higher Wall Street
Appointment of Bank of Israel chief and rising global stocks push up index
Tel Aviv shares ended Sunday higher, lifted by the long-awaited appointment of a new Bank of Israel governor and by a higher close on Wall Street over the weekend.
The TA-25 index of blue chip stocks got off to a strong start in the morning, sagged below 1,300 at mid-day but got a second wind after the government announced in the early afternoon that Karnit Flug would take over as central bank chief. The index finished up 0.7% at 1,305.57 and the broader TA-100 was up about the same amount at 1,729.27. Turnover, however, was a thin NIS 724.3 million.
"Her ideological closeness to the previous governor, Stanley Fischer, signals a continuation of low interest rates in the coming period," said Kobi Levi, fixed-income manager at Helman Adubi, explaining the market's positive reaction. Gains on Wall Street also helped, he said. "The U.S. stock market is keeping a positive tone in the wake of the agreement putting off a decision on the deficit ceiling until next year, which is saving the United States the risk of insolvency."
Global stock markets climbed to a five-year high on Friday as investors bet the Federal Reserve would extend its stimulus policy well into 2014.
The Dow Jones industrial average closed up 0.2% at 15,399.65 while the Standard & Poor's 500 Index added 0.7% to 1,744.50. and the Nasdaq composite 1.3% to 3,914.28. The Nasdaq is trading at levels last touched in September 2000 although it is still 24% from its peak before the tech bubble burst earlier that year.
MSCI's index that tracks the equity performance of 45 countries rose 0.7% to highs last seen in January 2008, while the broad Stoxx Europe 600 rose for a seventh successive day, its longest winning streak this year.
Uncertainty over when U.S. interest rates will rise caused the dollar to sink to an eight-month low. The greenback edged down 0.06% to a Bank of Israel rate of NIS 3.5330 while the euro strengthened 0.2% top NIS 4.8325.
In the bond market, the Tel-Bond 20, 40 and 60 indices rose as much as 0.27%, bringing their gains thus far this year to 6%. Leading the way was IDB Development Corporation, which rose 2% to 3% after a court ordered trustees to release NIS 520 million to repay bondholder debt. Medium- and long-term government bonds also rose in tandem with gains for U.S. treasuries over the weekend.
Technology shares paced the market higher on Sunday, led by a 4.7% advance for Allot Communications and rise of 3.2% for EZchip, 3% for auto-security-technology maker Ituran and 2.8% for Nova Measuring Instruments.
Online translation company Babylon finished down 6.6% in heavy trading of nearly NIS 24 million after it reported receiving a warning letter from Search engine Yahoo saying Babylon had violated certain terms of their agreement. Yahoo said it would give the company a chance to correct the problems.
Biotech stocks were sharply lower on Sunday, led by an 18.9% drop for BioCancell after the company said it was suspending clinical trial of its BC-819 treatment for pancreatic cancer. Mazor Robotobics, a maker of surgical guidance systems, closed down 7.3% after it reported on Friday that it would sell up to two million American Depositary Shares in a public offering.
Other biotech shares to end lower included Photomedix, which led the TA-100's list of losers on Sunday with a 7% drop. Evogene was off 4.6%, OPKO Healthcare by 4% and Protalkix by 2.2%. Against that, Compugen was the top gainer among TA-100 shares with a 4.9% rise and Clal Biotechnolgy added 3.4%.
Israel Chemicals led the most actives, with just under NIS 75 million shares changing hands on a gain of more than 2%. Oil Refineries Limited extended its rebound from Thursday, adding 2.6% as it takes steps to raise money and cut costs in the face of two quarters of losses.
Reuters contributed to this report.