Market Report / TASE Ignores Friday's Global Share Rally

The sell-down in Tel Aviv came in sharp contrast to the trends in global markets over the weekend, as world equity and oil prices rebounded.

The Tel Aviv Stock Exchange ended sharply down yesterday as a slump in finance and energy stocks offset rallies in global markets over the weekend, prompted by progress in resolving America's latest fiscal crisis.

The TA-25 index of blue chip stocks finished the day down 1.5% at 1,189.26 points, while the broader TA-100 ended off 1.3% at 1,056.83. Turnover was about NIS 720 million.

Finance shares were sharply lower, led by Israel Discount Bank's 3.3% decline. Bank Leumi was off almost 3% at close, and Bank Hapoalim ended 2.6% lower. The TA-Banking index was down 2.7% for the session.

Insurance shares also got a battering, albeit less so, with the TA-Insurance index down 1.1%. Menorah Insurance shed 2.7% and Phoenix 2.3%.

The sell-down in Tel Aviv came in sharp contrast to the trends in global markets over the weekend, as world equity and oil prices rebounded on Friday after Republican leaders of the U.S. House of Representatives said they would seek to break a budget impasse next week.

The Dow Jones industrial average closed up 0.4% at 13,649.70. The Standard & Poor's 500 Index fell 0.3% to 1,485.98. But the Nasdaq Composite Index edged down 0.04% to 3,134.71, and arbitrage stocks in Tel Aviv were similarly lower in many cases yesterday: Mellanox posted the biggest drop among TA-100 shares, with a 5.6% decline. Elbit Systems was off 3.7%.

Bezeq dropped 3.4% on news that CEO Avi Gabay said he was stepping down after six years once a successor is found, a process that would take up to half a year. IBI Investment House telecom analyst Uri Licht called Gabay "a man of vision who had impressive control over all aspects of a company that's complicated to run."

"This is a painful blow for Bezeq, coming just months after the resignation of CFO Alan Gelman," he added.

Clal Insurance fell 1.6% on reports that the Finance Ministry rejected a plan by the IDB Group to transfer control of the company from IDB Development Corporation to its sister company Koor Industries. IDB Holding Corporation, the Nochi Dankner holding company that was trying to engineer the deal, dropped 2.8%.

IDB Holdings' problem extended beyond the treasury's nixing the Clal Insurance plan. On Thursday, S&P Maalot lowered the credit rating for its IDB Development unit to IlB from IlBB, saying the outlook for its bond rating was now Negative.

Alium Medical Solutions, a developer of next-generation stents and stent-like devices, jumped 6.6% after it reported that over the weekend it received approval from Australian and New Zealand regulators for its product line. The company said the approval marked the first step in its strategy of expanding beyond its core European market to the Asia-Pacific region.

Queenco, the casino and reports operators, ended down 0.8% even though an arbitrator rejected a NIS 60 million claim against the company brought by the trustee operating the company Milomar in connection with the latter's 2008 sale of its unit Shahar Millennium to Queenco over tax calculations connected with the deal.

Reuters contributed to this report.

Bloomberg