Market Report / Shares End Mixed as Bonds Move Higher

Optimism after a good start to the U.S. earnings season and last week's strong U.S. June jobs data was offset by concerns about a domestic slowdown.

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Shares prices on the Tel Aviv Stock Exchange ended mixed on Tuesday, as a higher Wall Street overnight was offset by growing concerns over a slowing domestic economy. But the worries about a slowdown helped lift bond prices.

The benchmark TA-25 index edged 0.07% lower to 1,206.87 points, while the broader TA-100 added 0.06% to 1,088.69, all on paltry turnover of NIS 858.5 million. Bank and telecoms shares were mostly lower, with Bezeq subtracting 0.4% on turnover of NIS 81.7 million, making it the most active stock of the day. Partner Communications was off 0.9%.

The government's 10-year Shahar bond, which is not linked to the consumer price index, rose 0.51%, cutting its yield to 3.78%. The inflation-indexed Galil bond for the same term rose 0.22%, with its yield declining to 1.62%. A sale of 10-year government bonds on Tuesday met with strong demand and closed at 10438. It ended the day's trading at 104.87.The Tel-Bond 20, 40 and 60 indices all rose 0.09%.

Dudi Reznick, director of fixed income research at Leumi Capital Markets, attributed the rise to gains for U.S. treasuries overnight on Wall Street as well as to the release of the Bank of Israel minutes for last month's rate decision. The minutes showed that the monetary committee is seeing signs of a sharpening slowdown in economic activity, which would suggest that they will consider further cuts in the base lending rate going forward.

That feeling was reinforced by an International Monetary Fund forecast, showing world economic growth decelerating to 3.1% from a previous estimate of 3.3% this year.

Global equity markets extended gains on Tuesday, and the dollar traded near a three-year high, spurred by an optimistic tone after a good start to the U.S. earningsseason and last week's strong U.S. June jobs data.

The FTSEurofirst 300 indexof leading European companies hit its highest point in a month before paring some gains as a deal to provide Greece the latest 6.8 billion euro installment of its bailout bolstered the upbeat mood. The broad regional index rose 0.8% to a provisional close of 1,189.64.

On Wall Street, the Standard & Poor's 500 Indexwas up 0.6%at 1,650.05, while the Nasdaq Composite Index had added 0.5% to3,500.51.

The dollar index, which measures the greenback against a currency basket, was up 0.6% at 84.692.The euro was down 0.8% at $1.2766. Against the shekel, however, the dollar's strengthening wasn't much in evidence: The greenback lost 0.3% to a Bank of Israel rate of NIS 3.6500, while the euro shed 0.15% to NIS 4.6966.

The top gainers on the TA-100 index on Tuesday were online translation company Babylon, which posted a 3.6% gain. It was followed by Nochi Danker's holding company, Discount Investment Corporation, which extended its advances of recent days, to add another 3.5%. LivePerson, the dual-listed Internet company, tacked on 2.65% by close.

On the losing side, Cergon, a maker of wireless backhaul equipment, saw the biggest drop among TA-100 companies, shedding 2.8%. Cal Biotechnology fell 2.2%, Oil Refineries Ltd. 2.1% and semiconductor company EZchip 2%.

Semiconductor maker TowerJazz closed up 0.6% after it reported on Tuesday that Nujira Ltd. had extended its partnership agreement to include production of Nujira's chip that prolongs the battery life for fourth-generation smartphones. A market source estimated that the deal would mean $25 million of revenue for TowerJazz in 2014 and up to $50 million in 2016.

Teva Pharmaceuticals, the world's biggest maker of generic drugs, ended down 0.1%. Toward the end of Tuesday's trading day, the company said that the U.S. Food and Drug Administration has asked for additional data about its Treanda Injection product for treating non-Hodgkin lymphoma before granting it marketing approval. 

Reuters contributed to this report.

At the entrance to the Tel Aviv Stock Exchange, 2011.Credit: Bloomberg

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