Market Report / Uncertainty in Egypt, Portugal Pulls TASE Lower

All the exchanges' major indexes fell amid concerns about political upheaval in Egypt and economic uncertainty in Portugal.

All the major share indexes on the Tel Aviv Stock Exchange closed with losses Wednesday, led lower by political tension in neighboring Egypt and unease about the financial situation in Portugal.

The blue-chip TA-25 Index lost 0.8% to close at 1,189 points, while the broader TA-100 Index lost 0.7% to close at 1,072 points. The index of oil and gas shares shed 1.8%, while biomed stocks lost 0.9%. Real estate shares lost 0.2%.

Bond indexes gained ground, and the dollar climbed 0.6% to NIS 3.65. The VIX index, known as the fear index – a measure of the stock exchange's volatility – increased 4.3%.

Total turnover was NIS 889 million.

European shares were dragged lower by banking stockson Wednesday, after political turmoil in Portugalsaw the country's bourse post its worst day in two years and threatened to reignite the euro zonedebt crisis.

Fuelling the rush for the exit for many investors was a fresh batch of weak data overnight from China, which hit the mining sector, and political crisis in Egypt.

Euro zone banks fell 1.8 percent, the biggest sectoral faller, after the Portuguese government called emergency talks on its future.

In Asia, Japan's Nikkei average edged down in choppy trade, while Hong Kong shares had their worst day in two weeks.

Locally, notable shares included Shemen Oil and Gas, which dropped 11.8% after publishing a surprise shelf prospective to raise NIS 30 million in a share and option offering Wednesday.

Israel Corp. lost 1.3%, while subsidiary ICL lost 1.7%. ICL is down 25% so far this year over concerns that it could lose its potash profits if the state reevaluates its royalty policy on the exploitation of natural resources.

Following a meeting to hash out a debt deal for IDB Holding, which started Tuesday evening and lasted late into the night, it appears that the company may cease to exist. IDB Holding, part of Nochi Dankner's IDB group, owes bondholders NIS 2 billion. Under the deal in the works, bondholders would receive NIS 170 million from the company's kitty and another NIS 75 million to be invested by Argentine businessman Eduardo Elzstain, alongside 50% of IDB Development's stock. IDB Development is IDB Holding's only asset. The remaining 50% would be held by Dankner and Elzstain. IDB Holding's share price rose 1.9% on Wednesday.

With reporting by Reuters.

At the entrance to the Tel Aviv Stock Exchange, 2011.
Bloomberg