The Tel Aviv Stock Exchange ended broadly lower on Thursday amid declines on Wall Street and in Europe and Asia and bearish signals from the European Central Bank on risks to eurozone economies.
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The benchmark TA-25 Index finished down 0.8%, 1,229.74 points, while the broader TA-100 dropped 0.9% to end at 1,094.17 as a relatively thin NIS 732.8 million in shares changed hands. The day's declines left the two indices lower for the three-day holiday-shortened week. The TA-25 dropped 0.8%, cutting its year-to-date return to just 3.7%, while the TA-100 lost 0.9% to leave its increase so far this year at 4.3%.
European shares fell sharply in response to a lack of fresh economic stimulus measures from the European Central Bank. The ECB kept its interest rates on hold and failed to unveil new initiatives, such as special credit schemes for small enterprises, which some traders had been hoping for after recent weak economic data.
European Central Bank President Mario Draghiadded to the sour mood by taking a pessimistic view on the eurozone's outlook. "Weak economic activity has extended into the early part of the year and a gradual recovery is projected for the second half of the year subject to downside risks," he said.
The pan-European FTSEurofirst 300 Index closed1.1% lower at 1,180.65 points, while theeurozone Euro STOXX 50 Index fell 0.7% to 2,621.43 points. On Wall Street, stocks were flat in the early afternoon Thursday, with the Standard & Poor's 500 Index virtually unchanged at 1,554.15 and the Nasdaq Composite Index down 0.4% at 3,207.40. Investors were troubled by an unexpected jump in weekly jobless claims to a four-month high that raised questions about growth and the labor market's recovery.
The dollar and euro soared more than 3% against the yen on Thursday in their biggest one-day moves since 2008 after the Bank ofJapan announced a level of monetary easing to fight deflation that was seen as a radical overhaul of policy.
Against the shekel, both currencies' also gained after reaching some of their lowest levels in more than a year on Wednesday. The dollar climbed almost 0.4% against the shekel to a Bank of Israel rate of NIS 3.6310 while the euro added 0.2% to NIS 4.6497.
In spite of the two currencies' advances, forex trader FXCM warned that economic, geo-political and global trends all pointed to the continued strengthening of the shekel.
"The euphoria around the start of gas flows from the Tamar field and Israel's becoming a player in the global natural gas market are likely to draw foreign investors and capital," FXCM said. "The outlines of the budget cuts that Finance Minister Yair Lapid is signaling and the reconciliation with Turkey all enhance Israel's position and contribute to the shekel's appreciation."
Yitzhak Tshuva's Delek Group sunk 2.9% in heavy turnover of NIS 22.4 million. The decline came on the back of a sell-off of shares in its Wall Street-traded unit Delek USA. The U.S. Environmental Protection Agency proposed standards on March 29 to cut the amount of sulfur in gasoline by two-thirds by 2017, which is likely to boost the costs of refiners like Delek USA. The American unit shares have fallen more than 10% since the plan was announced and were off 0.8% in early afternoon Thursday.
TowerJazz fell 4%, adding to a 1.2% drop the day before. The Israel Corporation said on March 25 that it was converting all its capital notes into approximately 13.7 million ordinary shares, which it said it would neither sell nor trade, raising its stake to 39.4%.
Biotech company Kamada rose 2.7% on positive indications for its AAT lung treatment. It said dozens of patients that completed participation in the phase II/III clinical trial in Europe and Canada have elected to continue to receive treatment of inhaled AAT beyond the stipulated time frame. Kamada said it had begun to prepare for marketing authorization application, expected in 2014, subject to the success of the clinical trial.
Allot Communications, a maker of fixed and mobile broadband gear, rose 2.7% after it said it had secured a $6.5 million follow-on order from an unnamed mobile operator in the Europe, Middle East and Africa region.
With reporting by Reuters.