Market Report / Telecom Shares Nudge TASE Up; Dollar Gains Strength Against Shekel

While the advances were restrained, at least turnover of NIS 955.2 million was a sign that there was some life in the market.

The Tel Aviv Stock Exchange edged higher on Tuesday, led again by telecommunications shares, with turnover rising back up to respectable levels. The dollar strengthened against the shekel.

The benchmark TA-25 Index rose to as much as 1,231.41 points early in the session before trending lower in the final 90 minutes of trading to end up just 0.07% at 1,229.26. The TA-100 added just 0.1% to 1,097.6. But while the advances were restrained, at least turnover of NIS 955.2 million was a sign that there was some life in the market.

Telecommunications stocks soared, with the TA-Communications Index jumping 4.7% amid rumors that Golan Telecom, the upstart mobile network operator, is experiencing serious financial problems. That would be good news for its publicly traded rivals. Partner Communications was the biggest beneficiary, advancing 8.9% on turnover of NIS 45.7 million. Cellcom Israel gained 5.7%, while Bezeq, which controls Pelephone, added 3.4% on turnover of NIS 65.4 million.

In the forex market, the dollar and the euro both strengthened against the shekel, although the Bank of Israel did not intervene in the market as it did on Monday – for the first time since July 2011. The greenback appreciated by 0.3% to a Bank of Israel rate of NIS 3.6290, while the euro added nearly 0.5% to NIS 4.7324.

"It appears that the aim was more of a warning to speculators than an attempt to actually influence the exchange rate. The intervention was not that significant in money terms," Ofer Klein, the head of the economic desk at Harel group, said about the central bank's intervention Monday.

He noted that the Bank of Israel acted without warning, leaving the market to guess when and with how much money it would intervene in the future.

European shares finished lower, with concerns about a weak first-quarter-earnings season more than outweighing a rally in miners on prospects for continued strong metals demand from China.

The pan-European FTSEurofirst 300 closed 0.1% lower at 1,163.61, retreating from a session high of 1,172.07 in afternoon trade after a muted start on Wall Street, where the Standard & Poor's 500 Index was up just 0.1% at 1,564.69 and the Nasdaq Composite Index ahead 0.05% at 3,223.99 at midday on Tuesday.

Sentiment was hurt by an unexpected sell-off in U.S. aluminum giant Alcoa, which traditionally kicks off the global reporting season, as investors overlooked forecast-beating earnings to focus instead on weaker revenues.

The real-estate company Gazit Globe was the most active share of the session, with NIS 131 million changing hands on a decline of 4.3%. Controlling shareholder Chaim Katzman sold $54 million of stock in Gazit overnight in New York, cashing in on a 28% rally in its share price over the past year. The shares fell about 4.7% in New York trading on Monday and were lower by about 0.5% in the early afternoon Tuesday.

Yitzhak Tshuva's Delek Israel finished the day up 13.5% to NIS 89.30 after its parent company made a tender offer for the 13.1% of Delek Israel shares held by the public. Delek Group said it is offering minority shareholders NIS 86.55 each, a 10% premium on Delek Israel's opening price on Tuesday.

El Al closed up 5.1% on news that the FIMI private equity fund is going ahead with plans to buy a controlling stake in the airline. Under the revised deal, announced on Tuesday, FIMI will pay 62.5 agorot a share for its El Al stock, a 9.5% premium on El Al's opening price Monday

With reporting by Reuters.

Moti Milrod