Market Report / Clal Losses Weigh on TASE Insurance Shares

The Tel Aviv Stock Exchange closed with small gains Wednesday, boosted by a positive atmosphere in Europe. The blue-chip Tel Aviv-25 Index gained 0.07% to close at 1,213 points, while the broader Tel Aviv-100 Index gained 0.15% to close at 1,107 points. The Banks-5 closed unchanged, and the Real Estate-15 gained 0.16%.

Total turnover was NIS 822 million, which is less than the average of the past few months. Many traders are on summer vacation currently.

In Europe, shares again rose towards 10-week highs on Wednesday, led by gains on the French stock exchange, as the region's markets were buoyed by data showing the euro zone had emerged from recession. In Asia, Japan's Nikkei share average closed at a one-week high, and Chinese shares approached an eight-week high.

One notable exception to the small gains in Tel Aviv Wednesday was the index of insurance shares, which shed 2.2%, pulled down by Clal Insurance, which lost 3.6% on the news that Thai group CP was pulling out of a deal to buy 30% of the company's shares from Nochi Dankner's debt-laden IDB group. IDB Holding lost 0.42%.

Bonds issued by BGI fell 1.7%, boosting their returns to 21% -- further into junk territory. The company is close to a deal to buy a sizeable share of stock in high-tech company Emblaze, in order to get at Emblaze's $145 million in cash reserves and use that money to get a share of IDB from Dankner. Many Emblaze board members resigned in response (see story).

Insurance company Migdal lost 2.1%, after reporting profits of NIS 61 million for the second quarter, compared to a loss of NIS 98 million in the parallel quarter. The transition from loss to profit was primarily due to gains from investments, meaning a capital market recovery.

Clothing company Fox lost 2.1% after reporting revenues were NIS 491 million for the first quarter of the year, up 16.9% compared to the parallel. Operating profit was NIS 60.2 million for that period, up from NIS 50 million the previous year.

Software firm Babylon lost 0.7% after gaining 12% on Tuesday. The company had announced Tuesday that it was negotiating a potential merger with IronSource.

With reporting by Reuters.