Market Report / Tel Aviv Shares Static as Peace Talk Blunted by Disappointing U.S. Earnings

TA-25 index edges down 0.04% to 1,226.45 points, while the broader TA-100 falls 0.1% to 1,109.80 on turnover of only NIS 479.6 million.

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Shares on the Tel Aviv Stock Exchange changed little on Sunday, with investors encouraged by U.S. Secretary of State John Kerry's announcement over the weekend that peace talks between Israel and the Palestinians would resume but put off by disappointing U.S. earnings reports.

The benchmark TA-25 index edged 0.04% down to 1,226.45 points, while the broader TA-100 fell 0.1% to 1,109.80. Turnover slumped to a mere NIS 479.6 million.

Bank Hapoalim was the most active stock in thin trading, with NIS 28.2 million in shares changing hands on a decline of 0.3%. The bank is planning to retrench hundreds of staff members by the first quarter of 2014 to boost profits at a time when it has resumed paying dividends.

"We have difficulty identifying any engines that will bring about a sustainable rise in the local equities market," Bank Hapoalim economists said in their weekend comment. They expressed concern that the TASE will have difficulty lifting volume or prices during the traditionally quiet summer months. Second-quarter corporate earnings reports would reflect a slowing economy, with the exceptions of the real estate, insurance and food sectors, the comment said.

Government debt prices rose and global stock markets wavered on Friday when disappointing earnings results from Microsoft and Google gave investors pause after a recent string of gains that lifted major U.S. equity indexes to record levels.

MSCI's all-country world index rebounded, rising 0.07%. The pan-European FTSEurofirst 300 index of leading regional shares fell 0.01 percent to close at 1,209.00. The Dow Jones industrial average closed down 0.03% at 15,543.74, but the S&P 500 gained 0.2% to 1,692.09. The Nasdaq composite index dropped 0.7% to 3,587.61.

The euro rose 0.25% to $1.3142 on Friday, while the dollar index was down 0.3% at 82.583. The greenback also lost to the shekel, falling 0.53% to a Bank of Israel rate of NIS 3.5820. The euro weakened 0.5% to NIS 4.6976.

In the local bond market, the Tel-Bond 20, 40 and 60 indices edged 0.07% higher, pushing them to record highs. Bonds issued by Scailex, the holding company controlled by Ilan Ben-Dov, were notably higher, with its Series Tet advancing 5% to reduce its yield to 37%.

The government's 10-year shekel bond rose 0.27%, cutting its yield to 3.68%, while its inflation-indexed bond for the same term added 0.41%, to reach a yield of 1.51%.

The disappointing earnings from Google and Microsoft weighed on local technology shares, with the TA-Technology index down close to 1% on Sunday to 32.36. Among the biggest losers were online marketing company LivePerson, which lost 3.4%, biotech company Compugen, which shed 3%, and Allot Communications, which dropped 2.4%.

Babylon, on the other hand, finished 1.6% higher. The online translation company said on Sunday that it had invested NIS 4.6 million in Somoto, a software development startup which is close to making an initial public offering on the TASE.

Perrigo rose 0.4% after reporting over the weekend that it had received tentative approval from the U.S. Food & Drug Administration for its generic equivalent to Prandin, a type-2 diabetes treatment that has annual sales of approximately $250 million.

Top gainers on the TA-100 on Sunday were led by Partner Communications (up 4.5%), Phoenix Insurance (2.4%) and Israel Corporation (1.9%). Energy shares were mostly high, with the TA-Oil and Gas index up 0.6% at 1,147.54.

U.S. Secretary of State John Kerry speaks during a press conference at Queen Alia International Airport on July 19, 2013.Credit: AP