Stock Exchange - Guy Raivitz - 02082011
The Tel Aviv Stock Exchange. Photo by Guy Raivitz
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The Tel Aviv Stock Exchange followed global markets sharply lower on Thursday, pressured by a negative expiry for the February Maof options contract and by concerns that the U.S. Federal Reserve may be close to ending its monetary stimulus program.

In addition, Thursday’s surprisingly weak euro zone Purchasing Managers Index ‏(PMI‏) data for February dashed hopes of an early recovery for the recession-hit region.

The TASE’s TA-25 benchmark index slid 1.9% to 1,218.00 points, with the broader TA-100 subtracting 1.7% to a finish of 1,085.80. Turnover was a massive NIS 2.07 billion. The rout was across the board for shares, but the banking sector was the worst hit, with the TA-Banking index off 2.6% for the session and Bank Leumi, Mizrahi Tefahot Bank and Israel Discount Bank all falling more than 3%.

For the week, the TA-25 was off 0.2%, though it remains up 2.7% thus far this year. The TA-100 edged 0.1% lower for the week, leaving it 3.5% higher for the year to date. Minutes of the Fed’s January 29-30 policy meeting published on Wednesday showed some Fed policymakers feel the central bank may have to slow or stop the asset purchases because of concerns over the costs of the program. Worries over tepid job growth prompted the U.S. central bank last year to embark on an open-ended bond buying program in order to push down borrowing costs, until it saw a substantial improvement in the outlook for the labor market.

On top of that, initial claims for unemployment benefits rose more than expected last week while the Federal Reserve Bank of Philadelphia said its index of business conditions in the U.S. mid-Atlantic region fell in February to minus 12.5, the lowest in eight months.

As a result, Europe’s Eurofirst 300 index shed 1.3%, close to its biggest daily loss of the year so far, while London’s FTSE 100, Paris’s CAC-40 and Frankfurt’s DAX were as much as 1.8% lower. U.S. stocks tumbled, putting them on track for the biggest two-day decline since November.

Euro at six-week low

The euro dropped to a six-week low against the dollar and a three-week trough against the yen. Against the shekel, the euro sank 1.2% to a Bank of Israel rate of NIS 4.8422. The dollar firmed against the Israeli currency, adding 0.3% to NIS 3.6730.

Babylon, the online translation company, plummeted close to 6%, the biggest decline among TA-100 stocks and the fifth big drip in the last eight trading sessions. Nochi Dankner’s Discount Investment Corporation dropped 5.4% as did Hadera Paper.

Motti Zisser’s Elbit Imaging lost nearly 3% by closing time and its Series 4 and 6 bonds went down by more than 1.2%. After trading Thursday, Midroog lowered its rating for Elbit bonds to Ca from B2, saying the company was likely to fail to meet debt repayments in the near term.

Running against the rout, Ratio finished up 4.1%, making it the biggest gainer among the TA-100 stocks Thursday. The energy partnership raised close to NIS 50 million as part of its rights offering. The fund will help pay for its share of developing the Leviathan natural gas field this year.

Pluristem gained 4% Thursday after it said its PLacental eXpanded ‏(PLX‏) cells for the treatment of aplastic anemia had received orphan status from the U.S. Food and Drug Administration. “It opens pathways for using our PLX cells for additional indications in the field of hematology,” said CEO Zami Aberman. Allot Communications gained 1.9%, nearly matching Wednesday’s rise. On that day the company said India’s Tata Communications had selected Allot Service Gateway’s solution to provide cloud-hosted policy services to its Mobile Network Operator ‏(MNO‏) customers.