Market Report / Global Bullishness Eludes Tel Aviv Stocks

World markets show further signs of stabilizing

Tel Aviv shares ended their eighth straight session lower on Thursday, defying an upswing and a generally more bullish mood in global markets.

The Tel Aviv Stock Exchange's benchmark TA-25 index of blue chips finished down 0.3% at 1,189.67 points, capping a decline of 1.8% for the week. The TA-100 retreated 0.1% to 1,069.56, ending the week off 1.7% and trimming its year-to-date gain to just 2%. Turnover, however, was a brisk NIS 1.49 billion.

Trading started lower with the expiry of the June Maof (TA-25) contract, which was set at 1,192.62. Prices subsequently stabilized but never turned higher even as world equity markets and bonds gained on Thursday.

World markets showed further signs of stabilizing from a dramatic selloff as investors' view strengthened that major central banks' monetary stimulus measures would stay in place for the time being. Federal Reserve Bank of New York President William Dudley stressed in a speech that the newly adopted timeline for reducing the pace of bond buying depends not on calendar dates but on the economic outlook, which remains quite unclear.

European shares ended higher on Thursday, with the FTSEurofirst 300 index of top European shares provisionally closing 0.7% higher at 1,157.42, rallying for the third straight day. In New York, the Standard & Poor's 500 Index had added 0.7% at 1,614.24 in early afternoon while the Nasdaq Composite Index was up 0.9% at 3,405.13.

MSCI's world share index rose just over 1% to its highest level in a week.
U.S. Treasuries prices gained on Thursday before the Treasury's auction of $29 billion of seven-year notes, the final sale of $99 billion in new coupon-bearing supply this week. Benchmark 10-year Treasuries were last up 13/32, the yield at 2.4907%, after earlier trading as low as 2.47%.

In Tel Aviv, the Tel-Bond 20, 40 and 60 indices registered gains of up to 0.3% Government bonds, however, were mixed. The 10-year shekel bond edged down 0.1% to lift its yield to 3.78%. The equivalent inflation-linked bond rose 0.2% to cuts its yield to 1.67%.

Hadera Paper attracted excess orders for its NIS 112 million debt offering. In the institutional tranche, orders reached NIS 111 million, with the company selling NIS 90 million worth of paper.

In foreign currency trading the dollar rose strongly against the shekel for a second day running after it bottomed out on Tuesday at about NIS 3.60, prompting central bank intervention. The U.S. currency added close to 0.9% on Thursday to a Bank of Israel rate of NIS 3.6480. The euro almost matched that performance, appreciating 0.8% to NIS 4.7488.
Dealers attributed the greenback's strength to exporters' snatching up dollars in the last days of the month to hedge against further rises going forward. Currency trader FXCM said the shekel-dollar exchange rate continues to be characterized by high volatility.

"Nevertheless, despite this volatility the dollar-shekel rate is ranging between NIS 3.60 and NIS 3.65," FXCM said. "Right now the momentum is running in favor of the dollar again following its strengthening worldwide. To confirm its strength, we need to wait and see a breakthrough above the key level of NIS 3.656."

In equities trading, Bank Leumi was among the most actives, with NIS 109 million in shares changing hands on a decline of 1.6%. Many of the other most actives were little changed – Teva Pharmaceuticals was ahead just 0,3% on NIS 170 million, Israel Chemicals up less than 0.1% on turnover of NIS 98.8 million and Bank Hapoalim virtually unchanged with NIS 94.2 million changing hands.

Among the big losers in Thursday's trading, Given Imaging, the maker of a camera in a capsule for diagnosing digestive ailments, dropped 5.5%. Defense electronics maker Elbit Systems shed 3.6% and the biotechnology company Compugen lost 3.5%.
Holding company Mivtah Shamir led the gainers among TA-100 stocks, adding 4.8%. Apparel maker Delta Galil added 3% and biotech company Kamada gained 2.7%.

With reporting by Reuters.
 

Itzik Ben-Malki