Market Report / Shares Trade Quietly as U.S., Britain Enjoy Holidays

Turnover was a mere NIS 568 million, as the market waited for the Bank of Israel's decision on the June interest rate and for the biggest publicly traded companies to report their first-quarter results.

Shares traded calmly on the Tel Aviv Stock Exchange on Monday, with most stocks barely moving.

UK and U.S. holidays kept trading quieter than usual, as did easing concerns over the U.S. Federal Reserve's announcement last week that it would be scaling back its stimulus program.

Back at home, the market was awaiting the Bank of Israel's decision on the June interest rate – which after the market closed for the day turned out to be a surprise quarter-point reduction to 1.25% – and for the biggest publicly traded companies to report their first-quarter results.

The TA-25 index of blue chips and the broader TA-100 index both edged 0.1% higher to 1,225.56 and 1,101.53 points, respectively. Turnover was a mere NIS 568 million.

Technology shares were slightly lower, with Ceragon shedding 2%. Energy shares were also down slightly. Givot Olam fell 2.2% and ILDC Energy lost 1.3%. ILDC said on Monday it had received a one-year extension to continue drilling at its Sara site, which until now has come up dry.

"Trading in Tel Aviv is taking place in the shadow of fears about Japan," said Ran Shahar, head investments manager at Alfa Platinum Investment House. "Despite the injection of cash by the Japanese central bank, amounting to about $75 billion a month, it hasn't prevented deflation. Also in the United States, there is a lot of background noise about reducing monetary easing."

"In Israel, we're in the final stretch ahead of first-quarter earnings reports by blue chip companies. We're expecting the banks to show earnings above forecasts," he said.

European stocks, bonds and the dollar all traded relatively calmly on Monday after last week's turbulence, though another 3% dive in Japan's main share index kept investors on edge. The 3.2% drop on Tokyo's Nikkei brought its losses since Thursday to more than 1%, although the index is still up by more than a third this year.

European equity and bond markets were quiet due to the U.S. and UK holidays, but with last week's falls tempting buyers, the Euro STOXX 50 was up 0.8% and Italian and Spanish bonds were eyeing their first gains in three sessions.

The dollar was also steadier, though it slid back to 101 against the yen as the latest lurch in Japanese equities encouraged investors who have been unwinding their dollar hedges on share portfolios and heading for bonds.

The Bank of Israel did not set official exchange rates on Monday due to the holidays, but the rate decision caused the dollar to strengthen to NIS 3.71 in late trading, up from a Bank of Israel rate on Friday of NIS 3.6960.

In TASE trading, El Al Airlines fell 4.3% after it reported a quarterly net loss of $32.5 million, widening from $23.3 million a year ago. Revenue rose to $431 million from $429.1 million. Other losers included Alrov Real Estate, which dropped 2% after it turned in a NIS 3.8 million first-quarter loss, reversing a NIS 17 million profit a year earlier. Alrov Israel lost 1.6%.

Elco Holdings rose 2.5%, making it the biggest gainer among TA-100 shares on Monday. Its Electra unit gained 2%.

Exalenz BioScience, whose technology makes medical diagnoses based on patients' breath, climbed 33% on Monday, adding to its 50%-plus gain the day before. The company said on Sunday that the U.S. Food and Drug Administration had approved a new version its flagship BreathID product.

With reporting by Reuters. 

Reuters