Market Report / Hapoalim, Bezeq Lead TA-25 Higher

Shekel gains against dollar after Bernanke signals that U.S. stimulus policy has not run its course.

Tel Aviv shares capped a strong week Thursday as Bank Hapolaim and telecommunications company Bezeq led stocks higher, while the dollar tumbled and the euro rallied.

The benchmark TA-25 index rose 0.6% to close at 1,214.52 points, while the TA-100 rose 0.6% to 1,096.00 – all of it in heavy trading of more than NIS 1.4 billion. For the week, the TA-25 added 1.6%, bringing its year-to-date performance to 2.4%. The TA-100 gained 1.9% for the week and 4.5% so far this year.

Once again, the TA-Telecommunications index, this week powered by Bezeq, led the market higher on a 5.4% rise, giving it a return of 19.3% this year. Bezeq ended a week of gains with a 4.5% rise on turnover of NIS 142.9 million, the second highest of the day. The shares of Israel's biggest telecommunications company have climbed 10.7% so far this month and almost 39% for the year.

Hapoalim jumped 3.4% and led the most actives with NIS 148.5 million shares trading hands. The lender said it planned to resume paying a quarterly dividend after a five-year hiatus, with NIS 92.2 million shekels, or seven agorot per share, to be paid out for the first quarter.

In currency trading, the dollar slumped 0.85% to a Bank of Israel rate of NIS 3.6150, while the euro jumped 1.07% to NIS 4.7237. Yossi Fraiman, CEO of Prico Risk Management & Investments, blamed the greenback's slide on the U.S. Federal Reserve.

U.S. Fed Chairman Ben Bernanke said late Wednesday that the U.S. unemployment rate of 7.6% overstated the health of the job market. "A highly accommodative policy is needed for the foreseeable future," he said.The dollar index, which tracks the dollar against a basket of six currencies, fell to 82.418, its lowest level since June 25 and down 2.8% from a three-year high of 84.753 touched Tuesday.

"The minutes of the Federal Reserve Open Market Committee for June – alongside Bernanke's remarks last night that the U.S. economy will need significant and continuous help to return to a growth trajectory and lower unemployment – took the markets by surprise and sent the dollar down sharply against other major currencies," Fraiman said.

What was bad for the dollar was good for stocks, however, as the S&P 500 index climbed above its all-time closing high on Thursday. More than 80% of shares on the New York Stock Exchange were higher and all 10 S&P 500 industry sectors advanced, led by gains in materials and technology shares.

The Standard & Poor's 500 Index was up 1% in late trading at 1,668.98 after rising as high as 1,671.03, while the Nasdaq Composite Index added 1.2% to3,563.60. The MSCI's world index rose 1.3%, while the pan-European FTSEurofirst 300 closed 0.6% higher.

In TASE trading, other big gainers included Menorah Insurance, food retailer Super-Sol, biotech company Protalix and Allot Communications. All added between 2.3% and 2.6%.

The biggest losers on the TA-100 were food maker Osem and nonwoven fabrics maker Avgol, which both fell around 2%. Oil Refineries Ltd. and its parent company The Israel Corporation both finished 1.2% lower.

The wireless broadband technology company Alvarion plunged 42% after Silicon Valley Bank, a U.S. lender, requested the Tel Aviv District Court to enforce liens and appoint a receiver to collect a $3 million loan to the company. After trading, Alvarion said the court had decided not to "currently honor" the petition.

With reporting by Reuters.

Tess Scheflan