Market report / Teva tumbles 4.6% on heavy turnover
While Wall Street strongly rallied yesterday and European equities sailed north in tandem, Asian and Tel Aviv shares went the other way. The benchmark Israeli indexes all lost ground, though none of the losses were dramatic. Turnover remained thin, though the Passover break has ended, at NIS 1.7 billion.
The Israeli session was marked by another dramatic drop by Teva Pharmaceutical Industries stock: Shares of the generic drugs giant tumbled 4.6% on a third of the day's total turnover. Investors were possibly unmoved by news that Teva is resuming production at its Irvine, California plant after a whole year, following a growl from the U.S. Food and Drug Administration. There was also the issue of a wide arbitrage gap to close (see graph ).
Over in New York, the S&P 500 index hit its highest level since June 2008 as a flood of positive corporate results added to increasing optimism about America's economic growth outlook. Never mind the International Monetary Fund's prediction that the Chinese economy will surpass America's in 2016, in terms of purchasing power parity at least: Yesterday major industrials surged ahead. Carmaker Ford for instance gained 2.5% after announcing stronger-than-expected results and UPS rose 1.2% after raising guidance for 2011. Over in tech territory, the Nasdaq rose to its highest level since late 2007. But investors were tentative ahead of the ground-breaking press conference yesterday by U.S. Federal Reserve Board chairman Ben Bernanke.
In Europe, none of the indexes gained more than 1%, but all advanced with the sole exception of Copenhagen. So it goes. However, it was the fourth consecutive session of gains, which traders attributed to strong corporate results - at least compared with low expectations - both in Europe and the United States. In Europe they were charmed by the results of Swiss investment bank UBS, shares of which powered ahead by 3.9%.
In Asia, the mood was otherwise: All the exchanges, with the exceptions of Karachi and Malaysia, closed in retreat. The downtick was led by Tokyo, where the benchmark Nikkei lost 1.2%. The strong yen has been bad for exporters and as corporate-reports season approaches, the mood among investors was sober. Trading volumes were unusually thin.
As for Tel Aviv shares, stocks began the day under water and the dip grew deeper as the session progressed, with a minor uptick in late trading that failed to break into positive territory. The biggest loss was by the new index tracking oil and gas stocks, which fell by 1.2%, felled by a 7.3% loss by Givot Olam. The exploration partnership hadn't made any announcements yesterday: That's just how oil and gas stocks behave.
Among the blue-chip TA-25 stocks, Teva lost the most, followed by Discount Bank, which fell 2.6%. Banks Hapoalim and Leumi each lost 0.5%.