Nervousness on the Tel Aviv Stock Exchange over tensions with Syria dissipated over the course of the day on Monday, turning early losses for the benchmark TA-25 index to gains by the close. Higher share prices in Asia and the urge to catch up with Wall Street's rally at the end of last week also helped the market end higher.
The TA-25 index closed at 1,209.89 points, up 0.6% for the day as NIS 897.6 million in shares changed hands. The broader TA-100 index also gained 0.6% on Monday, closing at 1,087.06 points. Mid-cap stocks again outperformed the blue chips; the MidCap-50 index rose 1.5% to a close of 502.35 points.
In Asia, Hong Kong shares climbed to their highest in almost two months on Monday while onshore China markets rose to a two-week high, buoyed by robust gains for commodities-related counters as prices in physical markets soared.
European stocks fell on Monday, consolidating recent gains in a thin market and led lower by German utility E.ON after it traded without rights to its latest dividend. The euro zone's blue-chip Euro STOXX 50 index provisionally closed 0.5% lower at 2,749.71 points.
Wall Street stocks traded slightly higher in late-morning New-York time after the S&P 500 and Dow industrials hit record levels on Friday in the wake of a strong payrolls report. The Standard & Poor's 500 Index was up 0.2%, at 1,617.67 points. The Nasdaq Composite Index was up 0.4%, at 3,391.48 points.
In TASE trading government bonds were mixed, steadying after prices fell sharply the day before amid a perfect storm of Syrian jitters, rising U.S. yields, Standard & Poor's lowering of Israel's domestic-currency credit rating and the cabinet's decision to raise the deficit target for 2013. On Monday 10-year shekel bonds fell 0.1% to yield 3.63%. Inflation-indexed government bonds dropped 0.27%, raising their yields to 1.49%.
The chairman of Meitav Investment House, Zvi Stepak, said Sunday's drop could be a rehearsal for a much broader and deeper drop ahead.
"The world is in an abnormal period, but it will return to normalcy sooner or later. In my opinion it will be sooner," Stepak said. "Then we'll see declines in the tens of percentage points, collapse in U.S., German and other government bonds. From there, it's a short way to big losses for Israeli investors, too."
In foreign currency trading, the central bank stepped into the market again on Monday, helping to carry the dollar off new lows against the shekel, although just barely. The U.S. currency was set at a Bank of Israel rate of NIS 3.57, a gain of 0.03% on the shekel. The euro also edged higher to NIS 4.6768, an appreciation of 0.07%.
Gains were led by energy and insurance stocks; the TA Oil and Gas index closed up 1.2%, at 1,151.01 points. The TA-Insurance index closed up 1.1%, at 1,330.92 points.
Blue Square Real Estate led the most actives, with some NIS 49.2 million shares changing hands on a drop of 0.8%.
Yitzhak Tshuva's holding company Delek Group ended 1.6% lower after it sold shares equal to 0.9% of its equity to the public. Delek took the step to ensure its place in the TA-25 and TA-100 indexes, whose components are due to adjusted by the TASE at the end of May. The shares were sold at NIS 936 each, a discount of 2.8% on the market price.
Kamada lost 1.2% after it reported on Monday that its first-quarter loss widened to about $2 million from $472,000 a year earlier. Revenue was down 35% to $12.6 million.
Super-Sol rose 1% on Monday, a day before it is due to report its first-quarter earnings. Psagot Investment House said on Monday it forecast an improvement in the grocery chain's operating margins due to cost-cutting steps. "We believe Super-Sol will continue to show consistent but modest improvement in its results," Psagot said.
Discount supermarket chain Rami Levy, Super-Sol's emerging top competitor, was up 4.8% on Monday, making it the biggest gainer among TA-100-index shares.
With reporting by Reuters.
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