Nervousness over a possible U.S. attack on Syria sent shares on the Tel Aviv Stock Exchange down on Monday, while the shekel posted steep losses against the dollar and the euro.
Both the benchmark TA-25 index and the broader TA-100 index closed 1.2% lower on Monday, at 1,184.39 points and 1,082.09 points, respectively. Turnover was a relatively light NIS 923 million. The dollar strengthened more than 0.4% against the shekel, to a Bank of Israel rate of NIS 3.6030. The euro gained even more, adding 0.6% to NIS 4.8183.
"The possibility of an American operation against Syria is likely to cause foreign investors to flee the shekel," said currency trader FXCM in a report. "A scenario like that risks Israeli being drawn into the conflict in light of the threats made by the Syria government."
Bond prices were also lower, with the Tel Bond-20, 40 and 60 indexes down as much as 0.2%. The government's 10-year Sahar bond lost 0.13%, raising its yield to 3.96%. The inflation-indexed Galil 10-year bond was down 0.1%, pushing its yield up to 1.77%.
U.S. stocks edged higher in light volume on Monday after a steep drop in orders for durable goods pushed back expectations the Federal Reserve will soon begin to wind down its economic stimulus.
The Dow Jones industrial average at midday was up 0.1%, to 15,030.09 points, the S&P 500 index gained 0.2%, to 1,666.89 points and the Nasdaq Composite index gained 0.4%, to 3,671.927 points. The benchmark 10-year U.S. Treasury yield hit its lowest in a week after the figures were reported.
Italian shares led euro zone stocks lower on Monday, after the country was hit by renewed political tension, while overall trading volumes were thin as British markets were closed for a holiday. The blue-chip Euro STOXX 50 index was down 0.2%, to 2,820.74 points in late trading on Monday. Trading volumes were just 45% of the index's daily average volume of the past 90 days with less than one hour to go in the session.
On the TASE, there were few exceptions to the downturn. All the indexes fell by more than 1%. The hardest-hit sectors were energy and communications. The TA Oil and Gas index dropped 2.2%, to 1,208.13 points, while the TA Communications index plunged 3.3%, to 670.33 points. Cellcom Israel fell 4%, Bezeq 3.3% and Parter Communications by 2.6%.
Among the biggest losers were Mivtach Shamir, a major shareholder in food manufacturer Tnuva, and Strauss, which declined 5.2% and 4.7%, respectively. On Sunday an interministerial committee recommended imposing price controls on two key Tnuva products, and an official warned that others may follow.
A notable exception to Monday’s declines was Israel Chemicals, which jumped 2.75% and led the most actives on turnover of NIS 96.8 million. ICL's parent company, The Israel Corporation, rose 1.2%.
ICL joined a global rally on potash shares in response to a spike in U.S. corn and soybean futures due to unfavorable hot and dry weather. Fertilizer stocks traditionally track prices of grain and oil seeds, on the assumption that farmers tend to buy more fertilizer when crop prices are high.
The head of Russia's largest potash producer, Uralkali OAO, was detained in Belarus, escalating friction between the countries after the collapse of a joint sales pact in July threatened to undermine global potash prices.
Shares of Collplant jumped 19.4%, to 30 agorot, after a Chinese investor agreed to put $4 million into the developer of bioengineered plants for medical purposes at 53 agorot a share, a valuation considerable in excess of its market price.
With reporting from Reuters.
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