Market Report / TASE Shares Turn Higher After Poor Opening Spurred by Japan Scare

Mellanox gained 2.9%, recovering around one-fourth of the share's 12% tumble on Sunday.

The Tel Aviv Stock Exchange got off to a poor start Monday, as prices fell in response to another sell-off of Japanese shares. But by midday traders had turned their attention from east to west, sending stocks up on futures pointing to a higher opening on Wall Street.

The benchmark TA-25 index rebounded from a low of 1,219.94 points to close up 0.4%, at 1,227.60 points. The broader TA-100 index closed up 0.5%, with insurance shares leading the way. Turnover was just over NIS 1 billion.

The Nikkei share average tumbled 3.7% on Monday to 13,261.82 points, a six-week low, amid weak Chinese manufacturing activity and continuing concern that the U.S. Federal Reserve may scale back stimulus earlier than expected.

European shares – and as it turned out U.S. shares also -- eased on Monday, as concerns about the health of the German and American economies prompted investors to lock in profits on the top performers of recent months.

Data from the Institute for Supply Management pointed to an unexpected contraction in the U.S. manufacturing sector last month, boding ill for demand for European goods, while the International Monetary Fund halved its growth forecast for Germany.

The prospects of economic weakness dented expectations for a pick-up in earnings, seen as the most likely contender for driving more gains in equities after a 12-month long rally that was aided by central bank policy.

The FTSEurofirst 300 provisionally closed down 0.6% at 1,208.80 points. On Wall Street, the Standard & Poor's 500 Index was down 0.5% at 1,622.96 points, and the Nasdaq Composite Index was down 1% at 3,420.91 in late morning.

In currency trading, the dollar scored small gains on the shekel, adding 0.1% to a Bank of Israel rate of NIS 3.687. The euro edged 0.09% lower, to NIS 4.7945.

"On a technical level, we are seeing signs of a correction beginning with the sharp rise from NIS 3.56. The major support level is NIS 3.65. This is a historic support level that takes into account several technical elements," said currency trader FXCM.

It said the next resistance level will be NIS 3.72 and if the shekel breaks that it will likely reach NIS 3.75. If the reverse occurs, and the dollar sinks below NIS 3.65, it will probably continue to a range of NIS 3.61-NIS 3.62, FXCM said.

In TASE trading, Teva Pharmaceutical Industries led the most active shares, advancing 0.4% as NIS 94.3 million in shares changed hands. The company moved closer on Monday to selling its Lonquex drug for the treatment of neutropenia, a complication of chemotherapy, after a panel recommended its sale in the European Union. "The [Committee for Medicinal Products for Human Use] positive opinion opens the way to a final approval decision from the European Commission expected within the next few months," Teva said.

Mellanox, whose share price plummeted Sunday after the semiconductor company announced it was delisting from TASE, recovered slightly. The share gained 2.9% on turnover of NIS 86.6 million, the day's second highest. Nevertheless shares of Mellanox, which also trades in New York, remained down 9.5%, at NIS 187.40, in two days of trading.The share was down 4.8% in late-morning trading on Nasdaq, at $49.40.

Givot Olam Oil Exploration led the gainers on Monday, closing up 6.7% over the company's anticipated inclusion in the TA-100 index. Union Bank of Israel shares rose 5.3% after it reported, after the close of trade Thursday, that first-quarter net profit was unchanged from a year ago at NIS 35 million.

Orbit Technologies rose 7.8% on Monday after the satellite communication equipment manufacturer announced an NIS 11 million order from an unnamed European aircraft manufacturer.

Among the losers on Monday, Oil Refineries shed 1.8% to NIS 1.18 after Clal Finance analyst Yaron Raz lowered his rating for the stock to Market Underperform from Market Perform and cut his target price to NIS 1.50 from NIS 2.20. Raz questioned the accounting methods used by Oil Refineries to reduce its debt.
With reporting by Reuters.

Miki Kratsman
Ofer Vaknin