Tel Aviv shares extended their gains on Monday, as encouraging U.S. jobs data from over the weekend powered global markets higher. Bond prices, which took a pounding on Sunday, were mixed, while the dollar added to its gains against the shekel.
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The TA-25 index of blue chip stocks ended the day ahead 0.5% at 1,207.71 points, with the broader TA-100 up 0.44% to 1,088.01. Telecoms shares paced the gains with Partner Communications adding 3.1%, Cellcom Israel up 2.4% and Bezeq ahead 1.4% on turnover of nearly NIS 29 million. Insurance shares were one of the few sectors showing a loss for the day, with the TA-Insurance index down 0.8%, led by a 1.3% decline for Clal Insurance.
Lifted by unusually heavy turnover of NIS 187 million for Paz Oil, some NIS 1.11 billion in shares changed hands on the Tel Aviv Stock Exchange. Paz, however, dropped 1.2% after controlling shareholder Zadik Bino offloaded some NIS 200 million of his shares in the company at a discount to the market prices.
The sale was the second for Bino in five months but appears to be aimed at cashing in on a 30% rise in Paz shares over the past 12 months. The sale reduced his stake in Paz to 36%.
Global stock indexes rose on Monday after last week's stronger-than-expected United States jobs report, while the dollar pulled back after hitting a three-year high against a basket of currencies. Brent crudeoil eased after rising sharply on unrest in Egypt, which stoked concerns about global oil supplies.
Late Monday morning, the Standard & Poor's 500 Indexhad advanced 0.6% to1,641.39 and the Nasdaq Composite Indexby 0.1% to 3,484.37. U.S. Treasuries prices climbed on buying by bargain-minded investors, helping to bring benchmark yields down from near two-year highs.
Led by stocks more exposed to economic growth on optimism about recovery in the U.S., the FTSEurofirst 300 provisionally closed up 1.4% at 1,179.31.
In the local bond markets, the Tel-Bond indices were down as much as 0.7%, with Blue Square Real Estate Series Dalet bonds dropping 0.92% as the retailer's property division sold another tranche of the bonds. They now trade at an unusually low yield of 2.8%. Leser Group saw its bond drop 1.6% in heavy trading after the U.S. real estate company said it would stop working with the Midroog credit rating agency.
Government bonds were mixed after dropping sharply on Sunday on concerns that the U.S. Federal Reserve would stop buying U.S. bonds as the economy recovers. The 10-year Shahar shekel bond edged 0.1% higher, leaving its yield at 3.84%. The inflation-indexed Galil bond, however, was down 0.3% by close, lifting its yield to 1.65%.
The dollar advanced against the shekel on Monday, strengthening just over 0.4% to a Bank of Israel rate of NIS 3.6610. The euro added a more modest 0.15% to NIS 4.7038.
"The improved employment and jobless rates published over last weekend in the United States have supported the appreciation of the dollar opposite the main currencies and strengthens the view that the American central bank will need to pare back quantitative easing," said Yossi Fraidman of Prico Risk Management & Investments.
He said that after a week in which the dollar rate threatened to fall below the NIS 3.65 level, the "momentum" is now favoring the greenback and that the new resistance level would be the currency's previous record high of NIS 3,719.
In equities trading, Discount Investment Corporation, a Nochi Dankner holding company, led TA-100 shares higher on Monday, pushing ahead 4.9% fresh off a successful bond offering for more than NIS 200 million. Two real estate companies controlled by Alfred Akirov – Alrov Israel and Alrov Real Estate – both gained 3.5% by close.
The TA-Biomed index was down 0.3% to 860.91 after a 1.6% rise on Sunday on news that the Securities Authority approved a plan that would allow publicly traded biotech companies to pay equity analysts for coverage. The plan, which contains safeguards against conflicts of interest, aims to improve liquidity in the stocks by giving investors more information on the companies, which traditionally get little attention from the brokerage houses.
Reuters contributed to this report.