Market Report / Strauss Gains in a Quiet Market

Fears of U.S. Fed scaleback affect global stocks; record declines in Indonesia and India.

The Tel Aviv Stock Exchange closed Tuesday’s trading session mixed with a negative bias, as global stocks lost ground amid concerns that the U.S. Federal Reserve will start scaling back monetary stimulus measures next month.

The blue-chip Tel Aviv-25 Index lost 0.1% to close at 1,208 points, while the broader Tel Aviv-100 Index lost 0.2% to close at 1,200 points. The Banks-5 gained 0.9%, the Real Estate-15 lost 0.6%, and communication shares lost 0.9%. Gaining ground were oil and gas shares, up 1%, and biomed shares, up 1.1%.

Total turnover was NIS 842 million, which is lower than the average of late, but to be expected in August, when many traders are on vacation.

In Europe, shares hit a three-week low and a major volatility index spiked higher on Tuesday, as expectations hardened regarding the Fed move.

In Asia, Japan’s Nikkei average tumbled. Hong Kong shares suffered their worst day in nearly seven weeks, as investors took profits.

The selloff in emerging markets continued over fears of Fed fallout for these economies. The Indian rupee fell to a record low, Indonesian markets tumbled and Turkey raised a key interest rate to halt a slide in its currency.

IDB’s bonds traded as investors waited for bondholders to hold an assembly Tuesday evening to vote on a debt settlement. On Monday, Jewish Argentinian investor Eduardo Elsztain and the Dolphin Fund agreed to invest NIS 700 million in IDB Holding Corporation, in return for a 51% stake in IDB Development Corporation. Chairman Nochi Dankner would likely lose his post under the agreement. IDB Holding’s share price shot up 10% Tuesday.

Strauss reported that its Brazilian coffee subsidiary had much-improved results, the main factor in increasing the parent company’s profits by 2% to NIS 43 million in the second quarter of this year. Total revenues were down 0.7% for the quarter, compared to the parallel quarter in 2012, to NIS 1.3 billion. The company’s share gained 2% Tuesday. Its share is up 23% for the year.

With reporting by Reuters.

Bloomberg