The Tel Aviv Stock Exchange got off to a strong start of the week Sunday as bullish economic developments in Europe and the United States pushed markets overseas higher over the weekend. The benchmark TA-25 index and the broader TA-100 both rose 0.2% to finish at 1,212.35 and 1,083.12 points, respectively. Small and medium capitalization stock continued to outpace blue chip shares, with the TA- MIdCap 50 index rising 1.6% to a close of 466.61.
Turnover was a paltry NIS 633 million. Strong economic data buoyed global equity markets on Friday, lifting the Nasdaq to a 12-year closing high and the S&P 500 to a five-year high after rising more than 6% for the year and posting six straight weeks of gains for the first time since August. The FTSEurofirst 300 closed up 13.82 points, or 1.2 percent, at 1,162.10.
Data showing stronger international trade in China and Germany, and a report indicating the U.S. trade deficit had narrowed in December, pointed to improving global growth prospects. Meanwhile, European Union leaders reached agreement on the first-ever cut in their common budget on Friday after 24 hours of talks, seeking to placate millions at home struggling through government cutbacks and recession.
In foreign currency trading on Friday, the euro weakened more than 0.9% against the shekel to a Bank of Israel rate of NIS 4.9572. The dollar strengthened 0.2% to NIS 4.9572. "The economic data from the U.S. and China continue to be good and we believe the markets are continuing to rebound, which is likely to help stocks and hurt government bonds," said Asaf Shaul, deputy CEO for investments at Alfa Platinum Mutual Funds.
Tensions have eased
"Political tensions have eased, it seems, but the volume of trading by foreigners in Israel will remain low until we see an improvement in the geopolitical situation. It's worthwhile noting the record NIS 7.5 billion raised by the mutual funds last month, of which NIS 2 billion was for corporate bond funds," said Shaul.
Teva Pharmaceuticals rebounded Sunday from the disappointing fourth-quarter it reported last Thursday, with the shares gaining 2.8% to NIS 141.80 and leading the most active on volume of some NIS 44 million.
Steven Tepper of Harel Finance called Teva's decision last week to increase its dividend a "sportive signal" and reiterated his Buy recommendation and NIS 173.40 price target. He said the stock, trading at a multiple of seven, is cheap versus its peers.
Commtouch soared 11.8%, tracking its rise in New York over the weekend. Keith Fitz-Gerald of Money Morning praised the stock on Thursday. "I'm looking at small innovative companies, particularly in cyber security space. One of my favorites is called Commtouch Software. It's out of Israel, growing 30% a year, a cloud-based security solution," he said.
Bank shares were sharply lower, with the TA-Banking index down just over 1% for the session at 1,166.35 points. Bank Hapoalim paced the declines among lenders, falling 1.7%, with Israel Discount Bank not far behind on a drop of 1.2% and MIzrahi Tefahot Bank down 1.1%.
Azorim rose 4.6% by closing after the property developer reported after the market closed last Thursday that it had signed an agreement in principle to sell its 50% stake in Netanya's Ir Yamim mall for NIS 390 million to an unidentified buyer. Arison Group, which owns the other half of the mall, has veto power over the sale.
Elbit Imaging climbed a little more than 4% Sunday, days after it told holders of its Series Aleph and Bet bonds it would not make the next payment due them. Motti Zisser's property investment company is now working to produce a debt rescheduling plan after bondholders rejected the delay. Elbit's proposal is likely to include a significant debt-to-equity component and ceding control of the company to the New York hedges Fund York and DK Partners.
Reuters contributed to this report.