Losses amon Tel Aviv stocks are gaining momentum at Wednesday mid-afternoon, following the plunge Asian share prices after Wall Street chalked its second-biggest point drop in four years yesterday.
Israeli blue chips have been more or less in retreat since the great tumble in Asia two weeks ago, which began with a 9% drop in a day in Shanghai's stock markets. Share prices began to rally, there and here, but Tel Aviv shares were sent back into retreat throughout the last two trading sessions because of the uproar at the Bank of Israel, where a labor dispute has gravely disrupted routine work, and even led the prime minister to intervene.
From the start of the year, though, the TA-25 index has risen 5%.
At present it's down 2.1% to 953 points and the TA-100 index is losing 2.2% to 957. Tech stocks are retreating by 1.8%, pulled down by dual-listed stocks starting with negative arbitrage gaps, and the Tel Aviv Real Estate-15 index is losing 3%. The Tel-Bond index is flat however, with a negative bias of -0.04%.
Total turnover at mid-afternoon is heavy at NIS 910 million.
Holding company Koor is losing 3.7% after its subsidiary Makhteshim Agan published dismal results for the year 2006 yesterday. Makhteshim Agan shares are losing 2.6%.
Elbit Systems today said its sales passed the $1.5 billion mark in 2006 and its share is losing 2.8% nonetheless. It's that sort of day.
Teva, a dual-listed stock, is dropping 1.5% on turnover of NIS 10 million, and dual-listed share Nice Systems is down by 3.5%.
Shares in the biggest bank, Hapoalim, are down 1.5% and Leumi is steady at a loss of 1.9%.
Asian stocks tumble
Asian stocks plunged Wednesday after Wall Street chalked its second-biggest point drop in four years and rattled already nervous markets worldwide.
The tumble extended a couple weeks of international trading turmoil rooted in concerns about overheated global markets and slower growth in the American economy, a major export market for Asian companies.
Concern about U.S. sub-prime lenders and lackluster retail sales pushed the Dow Jones industrials down 1.97 percent overnight, sparking selloffs across Asia.
Stocks in Japan, South Korea, Hong Kong, China and Malaysia were all down at least 2%.
At the Tokyo Stock Exchange, the region's biggest bourse, the benchmark Nikkei 225 index sank 506 points, or 3%, to 16,673 points. Foreign investors who bought up stocks during the recent rally led the selling, traders said.
Hong Kong's Hang Seng index fell 2.6%, Indian stocks opened 3.2% lower, while Philippine stocks plunged 3.4%.
Woes on Wall Street
Overnight, the Dow fell 242.66, or 1.97%, to 12,075.96 amid concerns about U.S. sub-prime lenders, who provide mortgages to people with poor credit. The U.S. Commerce Department also said sales at retailers rose a less-than-expected 0.1% in February, suggesting consumer spending might be waning.
While Asian markets are sensitive to signals of a slowdown in the U.S. economy, analysts said the economic fundamentals of the Asian region remain strong. The recent declines in stock prices were more likely a correction to cool markets that had risen too far too fast in recent months.
"The sell-off is in sympathy with the sharp sell-off we saw overnight on Wall Street, and it highlights the continued nervousness out there," said David Cohen, chief of Asian economic forecasting at Action Economics in Singapore.
"In perspective you could still say that this is a correction after the strong rally that was experienced for the previous several months around the world," he said.
While the U.S. retail sales data and mortgage news that prompted the sell-off on Wall Street "are a little concerning," fundamentals such as strong U.S. jobs data released Friday were still supportive of global equities.
"The world economy seems to be remaining on an upward trajectory," Cohen said.
The slump reversed a modest recovery in global markets from even bigger losses that started late last month with an 9-percent plunge in Chinese stocks Feb. 27, which contributed to a 416-point drop in the Dow later that day.
The Shanghai Composite index, which has been recovering in recent days, was down 1.85% Wednesday.
In India, jittery investors sold their holdings in almost every bluechip stock, dragging the 30-share Sensex - the benchmark stock index of the Bombay Stock Exchange - down by 403 points, or 3.2%, to 12,580 in the first 30 minutes of trading.
Indian shares have seen wild swings each time the global markets have turned weak. The Sensex tumbled a stunning 43% in May-June last year - only to bounce back to hit a new highs.
The Sensex reached a record 14,643 on Feb. 7, before losing about 14% in the latest round of global declines.
Elsewhere Wednesday, Sydney's S&P/ASX 200 was 1.76% lower, while Singapore's Straits Times benchmark had lost about 2.79%, and South Korea's Kospi declined 2.0%.
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