Market Report

Tel Aviv Shares End Higher but Headache Continues for Teva

While Teva reaches for the painkillers, it was a good day for another Big Pharma company, Perrigo. The TA-Finance index was the star performer for the week, boosting its year-to-date return to 16.7%.

Tel Aviv shares scratched out a day of gains Thursday, overcoming bearishness in overseas markets and another downward bump for Teva Pharmaceuticals, as Bezeq, Perrigo and Babylon rose.

The benchmark TA-25 index finished the day ahead 0.4% to a close of 1,288.19 points, on turnover of NIS 1.28 billion. The broader TA-100 index added almost 0.3% to end at 1,161.77. Bezeq led communications shares higher, ending 2% higher on turnover of NIS 83.3 million.

Thursday's advance left the TA-25 barely changed for the week, with just a 0.1% rise, while the TA-100 lost 0.3%. The TA-Finance index rose 2.8% for the week, boosting its year-to-date return to 16.7%. The week's worst performer was the TA-Technology index, which fell 4.5%, putting its return so far this year into negative territory.

Teva, pummeled for a fourth straight session as it seeks to steady itself over the turmoil surrounding CEO Jeremy Levin's departure, ended down 2.4% on turnover of NIS 157.9 million, as Barclays downgraded its rating on the stock to Market Weight and J.P. Morgan lowered its bonds rating to Underperform. Better-than-expected earnings for the third quarter failed to improve sentiment for the stock.

Wall Street stocks traded slightly lower late morning New York time Thursday, as market expectations that the Fed would continue its $85 billion-a-month bond-buying stimulus well into next year were not fully met. Some now see a chance for the Fed to begin a wind down in December.

The Dow Jones industrial average and the Standard & Poor's 500 index were both off 0.4%, at 15,555.57 and 1,756.63, respectively. The Nasdaq Composite was down 0.5%, at 3,911.861. The pan-European FTSEurofirst 300 index was up 0.3% after climbing to a five-year high in the previous session. 

The euro fell while the U.S. dollar rose on diverging market views about the next moves from top central banks, after figures from Eurostat showed inflation in the 17-country bloc unexpectedly dropped to a near four-year low in October and unemployment stayed at a record high in September. Against the shekel, the euro weakened 0.8% to a Bank of Israel rate of NIS 4.8030. The dollar was steady against the Israeli currency at NIS 3.5190.

"The Bank of Israel won't find it difficult to keep interest rates low over time, especially as inflation is under the mind-point of the government's target," said Yossi Fraiman, CEO of Prico Risk Management & Investments. "We believe that the Bank of Israel will resume intervening in the coming days to stop the continued depreciation of the shekel to below NIS 3.5."

Earnings news was a major factor in equities trading Thursday. Perrigo advanced 3.3% as NIS 47.3 million in shares changed hands after it beat analysts' expectations for earnings. The world's biggest maker of over-the-counter drugs said its fiscal first-quarter net sales rose 21%, to $933 million. Adjusted earnings per diluted share increased 20% to $1.52.

Super-Sol extended its losses for a second day, dropping 3% Thursday, a day after it reported a drop in quarterly net profit. A sale of assets and a capital loss write-off had boosted profits a year earlier.

Apparel producer Delta Galil led gainers among TA-100 stocks, extending its rally for a second day and rising 4.3% by close. On Wednesday, the company reported that net income attributed to shareholders before nonrecurring items rose 43% from a year ago, to $14.2 million in the 2013 third quarter.

Babylon, the online translation company beset by woes with Google and Yahoo! (its two biggest sources of income), rallied Thursday to end 2% higher, on turnover of NIS 35.8 million. "Babylon shares corrected somewhat from the sharp drops in trading [Wednesday] but the future of the company is still murky," said Amit Rosenzweig, investments manager at Halman Aldubi.

Other top gainers in Thursday's trading included Lev Leviev's Africa Israel Properties, which gained 3.4%, and Amos satellite operator Space Communications, with a 2.6% rise. Allot Communications led tech stocks lower, shedding 5.7%.

The TA-Biomed index sank 2% to 985.15, paced by drops of 4.2% for Pluristem, 3.9% for Evogene, 3.7% for PhotoMedex and 3.2% for OPKO Healthcare.

Teva's headquarters in Jerusalem.
Bloomberg