Market Report / U.S. Data Give TASE a Lift

Investors joined other global markets in celebrating unexpected good news from the U.S. economy.

The Tel Aviv Stock Exchange ended sharply higher on Tuesday in unusually heavy holiday trade as investors joined other global markets in celebrating unexpected good news from the U.S. economy.

The TA-25 index ended 2.3% higher at 1,216.35 points while the broader TA-100 added 2.3% to 1,079.01. Banking shares paced the advances, with the TA-Banking index jumping 4.9% to 1,027.72 points. The TA-Technology added 1.1% to 358.22 while the TA-Communications index eased 0.1% to 481.27.

Even with the trading day ending at 2:30 P.M. on the TASE because of the Sukkot holiday, turnover was a high NIS 1.18 billion.

In foreign currency trading, the dollar and the euro both took a tumble against the shekel. The greenback was fixed at a Bank of Israel rate of 3.888, losing 0.61% against the shekel, while the euro was set at 5.021, weakening 0.9%.

U.S. manufacturing unexpectedly expanded in September for the first time since May as new orders and employment picked up, but the growth pace showed that the economy was still stuck in a slow recovery.

The Institute for Supply Management said on Monday that its index of national factory activity rose to 51.5 from 49.6 in August.

In Tel Aviv, bank shares rallied across the board. Bank Leumi led the pack, finishing up 8.2%, with Bank Hapoalim not far behind with a 4.5% increase. Among the smaller lenders, Israel Discount Bank ended up 3.4%, Mizrahi-Tefahot Bank 3.6% and First International Bank of Israel 2.8%.

Insurers Migdal and Menorah both jumped 6.7%, carrying the insurance shares index up a sharp 7% to 951.96 points for the day.

HOT Telecommunications ended up nearly 1% at NIS 37.24 on turnover of NIS 1.5 million after its controlling shareholder, Patrick Drahi, raised his offer to buy out minority shareholders by NIS 1 to NIS 38 a share. Market sources say Drahi believes the market is undervaluing the company.

Among other telecommunications shares, Partner dropped 2.7% while its parent company, Scailex, finished 1% higher. Scailex said last Thursday that holders of bonds representing some NIS 1.7 billion in debt have the right to demand immediate repayment if its stake in Partner falls under 26%.

The report came after regulators asked Scailex to explain how it would meet repayments between now and 2014 after Partner said it was ending automatic dividends.

Shares in the partners at the Shimshon drilling site did well yesterday, even though the latest estimates show that the field has a potential for no more than 15.6 billion cubic meters of natural gas, far less than the 65 BCM previously estimated. Modiin shed 1.4%, but the biggest partners, Isramco with a 29% stake, gained 2.3%, and Nafta advanced 1.4%.

IDB Development Corporation ended 3.2% higher amid sharp interest from foreign investment funds, speculators and short sellers with varying interests - either to consider wresting control of the company or at least make quick trading profits.

Elbit Systems won a contract for the supply of battle management systems for the Royal Australian Navy's landing craft. The shares rose 4.9% even though the company said the contract was not material for future earnings.


With reporting by Reuters