Market Report / Tel Aviv Shares Extend Gains on U.S. Economic Data

El Al Airlines climbs 8.2% on reports that Israeli-American entertainment entrepreneur Haim Saban might buy a controlling stake.

Tel Aviv shares rose for a second session Monday as global stock markets hit record highs, underpinned by improving U.S. economic data that overshadowed a credit squeeze in China. The dollar, however, slumped against the shekel.

The benchmark TA-25 index added 0.7% to close at 1,346.99 points and the broader TA-100 rose 0.65% to 1,215.51 on heavy trading of more than 1.5 billion shekels ($431 million). The market was led higher by telecom firm Bezeq, which jumped 3.8%, and by banks Hapoalim and Leumi, which gained 2% and 1.2%, respectively. Hapoalim was the most active stock of the day with 71.4 million shekels in shares changing hands.

Eli Kadosh, chairman of the investment committee at Price Investments & Risk Management, said share prices should stay buoyant as new money keeps flowing to stocks due to low bond yields. The Tel Aviv Stock Exchange should also benefit from Israel’s relatively high economic growth, he added.

“This process has already expressed itself with the stock-market rises over the past few months and the public’s joining the market via mutual funds,” Kadosh said, playing down the effects of the U.S. Federal Reserve’s plans to wind down its stimulus program.

Wall Street shares bolted higher after data showed that U.S. consumer spending hit a five-month high in November, while consumer sentiment has improved in December. At the same time, signs of strength in the world’s largest economy have not spurred inflation, with a price index for consumer spending unchanged for a second straight month.

In late morning New York time, the Dow Jones Industrial Average was up 0.5% at 16,297.24. The Standard & Poor’s 500 Index was also up 0.5%, at 1,827.78, while the Nasdaq Composite Index had risen 0.9% to 4,139.86.

European shares rose for the fourth consecutive session, buoyed by corporate takeover activity and gains on Germany’s DAX, which set a record high. The pan-European FTSEurofirst 300 index rose 0.4% to 1,292.78 points. The euro zone’s blue-chip Euro STOXX 50 index also advanced by 0.4%, to 3,060.26 points, while the DAX rose 0.8% to a record intraday high of 9,471.76 points.

In foreign currency trading, the dollar lost more than 0.4% against the shekel to a Bank of Israel rate of 3.5030. The euro edged 0.02% higher to 4.7968 shekels.

In the fixed income market, the government’s 10-year shekel bond edged 0.08% higher, trimming its yield to 3,59%. Its 10-year inflation-indexed bond dropped 0.08%, raising its yield to 1.44%. On Monday, the Bank of Israel said it was leaving its base lending rate unchanged for January at 1%.

Among the day’s biggest gainers, Oil Refineries climbed 4.5% ahead of a rights offering. Over the weekend, Israel Petrochemicals, which owns 37% of Oil Refineries, said it would fully subscribe to the offering, injecting 128 million shekels of badly needed cash into the company.

El Al Airlines advanced 8.2% on reports that Israeli-American entertainment entrepreneur Haim Saban might buy a controlling stake in the carrier. Can-Fite, which is developing treatments for inflammatory and cancer diseases, soared 23.8% after it reported positive results for Phase IIB clinical trials of its CF-101 anti-inflammatory drug.

Among losers, semiconductor maker TowerJazz retreated from a surge the day before on a joint venture with Japan’s Panasonic, dropping 5.4%.

With reporting by Reuters.

Moti Milrod