Last update - 00:00 20/03/2008
Tel Aviv stocks drop 1.5% as dollar rises to trade at NIS 3.3914
By Natan Sheva, Haaretz Correspondent
The Tel Aviv Stock Exchange reported a sharp decline of 1.5% on Thursday, even as the value of the U.S. dollar rose by 0.34 percent to be traded at NIS 3.3914.
Tel Aviv stocks gained ground on Wednesday, finishing the choppy session firmly higher despite intense intraday volatility and a drop in stocks on Wall Street.
On Tuesday, the U.S. Federal Reserve lowered its key lending rate by 0.75% to 2.25%.
The markets applauded and Nasdaq soared 4.2% that day, the weighty Dow Jones gained 3.5% and the S&P-500 index advanced by 4.2%, which is a huge deal considering how weighty its companies are.
By Wednesday, however, the Ben Bernanke effect had waned and U.S. stocks traded in the red. Omens of the downturn did not dismay the locals, it seems
Interest rates in Israel are expected to drop between 0.25-0.50% next week, even as inflation continues to rise.
Analysts believe continued drops in U.S. interest rates and the weakening of the dollar could lead Bank of Israel Governor Stanley Fischer to lower interest rates as well.
A drop in the New York Stock Exchange on Wednesday also influenced Asian markets, leading to a drop in exchange rates.
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