Market Report

Bank Shares Lead TA-25 Index Lower

Shares of Givot Olam plunge 8.9% on news of halt in drilling.

When it opened Monday morning, the Tel Aviv Stock Exchange benchmark TA-25 index seemed to be heading for yet another record high, but the momentum was soon lost as bank stocks dragged down the average.

Both the benchmark index and the broader TA-100 index closed down 0.4% on the day, at 1,372.33 and 1,229.72 points, respectively. Turnover was a brisk NIS 1.52 billion.

Banking shares ended sharply lower, pulling the Banks-5 index down 1.3%, to 1,335.55 points. Shares of Bank Leumi fell 1.4% on turnover of NIS 68.7 million, while Bank Hapoalim fell 1.6% on turnover of NIS 56.2 million, making them the day’s most heavily traded shares. Israel Discount Bank closed down 1.1%.

U.S. stocks barely moved Monday, as investors found few reasons to keep pushing shares higher after eight straight weeks of gains despite data pointing to higher spending on manufacturing and construction. At midday, the Dow Jones industrial average was down 0.01%, at 16,085.32 points, the Standard & Poor’s 500 Index was up 0.1% at 1,808.21 and the Nasdaq Composite Index off 0.02%, at 4,059.13.

European shares edged lower as German steelmaker ThyssenKrupp plummeted after failing to find a buyer for its problematic Brazilian mill and British retailers were hit by margin worries. Britain’s FTES 100 index fell 0.8% to 6,595.33.

In foreign currency trading, the dollar ended a string of losses adding up to about 1% over the last week against the shekel to appreciate 0.2% Monday to a Bank of Israel rate of NIS 3.5300. The euro, however, weakened by 0.4% to NIS 4.7781.

The dollar has been suffering globally as the U.S. stock market rallies, but things could change at the end of this week when the government releases its job reports on Friday.

“If the employment report is a surprise positive, it increases the chances that the U.S. Federal Reserve will taper off its purchases of bonds, which will raise yields in the U.S. bond market and strengthen the dollar,” FXCM said.

The fixed-income market, which rallied on Sunday after Fitch upgraded Israel’s credit outlook over the weekend, was mixed Monday. The Tel Bond-20 index edged up 0.3%, the Tel Bond-40 index edged down 0.03% and the Tel Bond-60 index was unchanged. The government’s 10-year shekel bond fell 0.16%, raising its yield to 3.53%. Its 10-year inflation-indexed bond dropped 0.21%, boosting its yield to 1.42%.

Oil explorer Givot Olam plunged 8.9% by close, making it the biggest loser among TA-100 index shares for the day. Trading in the stock was suspended during the day after the company reported that drilling at the Meged 6 site had been stopped due to technical problems. Givot said it could not say when drilling would resume.

Other big losers included online translation company Babylon, which resumed its decline, falling 3.1% Monday after jumping 3.5% the day before. All told, the stock has fallen by about a third in the past 11 sessions as it reels from lost contracts with Google and Ask.com.

Africa Israel Investments, Lev Leviev’s real estate holding company, dropped 2.5% and Hadera Paper Mills, whose employees are on strike, lost 2.2%.

Mazor Robotics, a maker of surgical guidance systems, jumped 7.2% after it said it received an order for its Renaissance system from its distribution partner in Southeast Asia. Other gainers included Oil Refineries, which rose 6.9% ahead of a rights offering; apparel maker Delta Galil, which rose 3.5% and Allot Communications, which advanced 2.4%.

With reporting from Reuters.

Miki Kratsman