Market Report / Air Force Raid Sends Tel Aviv Stocks Lower

The TA-25 index of blue chips ended the day at 1,176.67 points, a decline of 0.8% as turnover on the TASE reached NIS 1.05 billion. The broader TA-100 index was down almost 1% to 1,047.59.

The Tel Aviv Stock Exchange ended lower Wednesday after reports that Israeli fighter jets attacked targets on the Syrian-Lebanese border, heightening concerns that Israel could be dragged into a conflict with Syrian President Bashar Assad’s beleaguered regime or the Lebanese militant group Hezbollah.

The TA-25 index of blue chips ended the day at 1,176.67 points, a decline of 0.8% as turnover on the TASE reached NIS 1.05 billion. The broader TA-100 index was down almost 1% to 1,047.59. Financial, energy and real estate shares led the market lower, with the Real Estate 15 index off 1.4% to 311.24, the Oil and Gas index down 1.4% to 1,10.89 and the TA-Banking index off 1.1% to 1,17.45.

In foreign currency trading, the dollar weakened a little more than 0.1% against the shekel to a Bank of Israel rate of NIS 3.725 while the euro gained a sharp 0.7% to NIS 5.046.

Israeli forces attacked a target on the Syrian-Lebanese border overnight, Western diplomats and regional security sources said Wednesday, at a time of growing concern over the fate of Syrian chemical and conventional weapons.

Meanwhile, investors seemed to have shaken off their worries about Bank of Israel Governor Stanley’s Fisher’s plans to step down in June. Having rebounded from Tuesday’s lows, the TA-25 was climbing higher in early trading Wednesday until news of the Air Force raids.

“Israel hasn’t become a flock of sheep without a shepherd and the governor’s resignation won’t have a fundamental effect in the market,” said Idan Azoulay, mutual fund manager at the Epsilon Group. “The ones who will have an impact are the parties sitting in the coalition and how they solve the deficit problem.”

Fischer sought to assuage the markets at a press conference Wednesday, discounting Tuesday’s sell-off on the news as a knee-jerk reaction to unexpected change and expressing confidence in Netanyahu’s management of the economy.

Israel Chemicals led the most active shares of the day, with NIS 172 in stock changing hands on an 0.4% decline. The stock has been enjoying volume of NIS 100 million or more in five of the last seven trading sessions, rising about 4% along the way.

Babylon, the online translation company on its way to an initial public offering on Wall Street, ended two sessions of strong rises gains to crash 7% Wednesday, making it the biggest decliner among TA-100 stocks for the session. Other big drops were registered by Africa Properties, which fell 4.1%, and Discount Investment Corporation, which dropped 3.5%.

Yuval Tebol