Market Report

Israel Chemicals Rallies as Market Rebounds

Signs that the crisis in Syria is receding and that a potash price war may not materialize lead to a market rebound on Monday.

Tel Aviv shares did an about-face on Monday, rebounding strongly in heavy trading just one day after they had retreated in face of renewed concerns over Syria. Israel Chemicals rallied on news that two Russian potash makers may settle a dispute that threatened global potash prices.

The TA-25 index of blue chip stocks ended the session up 1.2% at 1,179.84 points on turnover of NIS1.33 billion. The broader TA-100 index gained 1.1% to close at 1,080.65.

Shares responded to a higher opening on Wall Street, after upbeat Chinese export data lessened concern about a sharp economic slowdown in a key developing economy. The Dow Jones industrial average was up in late morning New York time 0.6%, at 15,013.20. The Standard & Poor's 500 Index gained 0.5% to 1,663.54 and the Nasdaq Composite Index gained 0.6% to 3,682.44.

European shares slid, however, as disruptions to business in the Middle East hurt oil firm BG Group and the threat of a spike in crude prices fueled profit-taking on construction firms. The broad FTSE Eurofirst 300 index finished 0.15% lower at 1,228.07.

In addition, prospects of a U.S. attack on Syria appeared to be fading, as the White House faced an uphill battle to convince the U.S. Congress to back military action. Speculation about the possibility that the administration might delay a vote surfaced on Sunday, when Secretary of State John Kerry, speaking in Paris after meeting Arab foreign ministers, did not rule out returning to the United Nations Security Council to secure a Syria resolution.

In foreign currency trading, the euro rose 0.2% against the dollar and the dollar gained 0.3% against the yen. The dollar index was down 0.2% on Monday, extending Friday's 0.6% drop. Against the shekel, the dollar also lost 0.2% to a Bank of Israel rate of NIS 3.6250, while the euro edged up 0.02% to NIS 4.7821.

Yossi Fraiman, CEO of Prico Risk Management & Investments, said the dollar needed to first stabilize at NIS 3.66-3.68 before it likely made a move to above NIS 3.72.

In the TASE, ICL soared 6.5% at close on turnover of NIS 194.1 million, amid market speculation that a resolution might be in sight for a dispute that split the Belarus potash consortium, a development that could herald higher potash prices. Russian billionaire Vladimir Evtushenkov has denied any interest in acquiring a stake in Uralkali, the world's largest potash miner.

"The rebound [in the shares of potash producers] may be a reflection of people thinking that the Russians may not engage in a price war," said Gavin Graham, chief strategy officer at Canada's Integris Pension Management Corp.

Technology and biotech shares paced the market's gains on Monday, with the TA-Technology and TA-Biomed indices both up 1.1% to index up 1.1% to closes of 325.41 and 962.84, respectively. Babylon jumped 4.8% on turnover of more than NIS 15 million. Brainsway rose 2.3%, after it announced on Monday that the U.S. Food and Drug Administration had approved multi-center clinical trials for its Deep TMS system for brain disorders.

H. Mer rose 4.1%, after the private equity fund FIMI bought a 29.2% stake in the maker of telecom towers and other products for the communications and defense sectors at NIS 30 a share. While Mer closed Monday at NIS 43.37, existing shareholders are due to receive a NIS 77 million dividend, equal to NIS 10.14 a share, which closes much of the discount.

Reuters contributed to this report.

Bloomberg