Market Report / U.S. Economic Data Lift TASE in Last Hour

The stock exchange's late rally was spurred by a U.S. Institute for Supply Management report that showed its index of national factory activity rose in June.

Tel Aviv share prices bounced up and down through most of the session on Monday before rallying in the final hour on news of encouraging economic data from the United States.

The Tel Aviv Stock Exchange's TA-25 index of blue chips finished at 1,195.14 points, a gain of 0.4% for the day, while the broader TA-100 advanced 0.5% to a close of 1,076.63. Turnover was a modest NIS 851.2 million.

Financial stocks led Monday's gains, with the TA-Banking index ahead 1.1% by close to 1,133.22 and the TA-Insurance index trialing just barely with a 1.05% gain to 1,343.09. Israel Discount Bank gained 2.2% and Bank Hapoalim gained 1.1% on heavy trading of NIS 27.4 million. Among insurers, Menorah rose 1.9%, Harel rose 1.6% and Migal rose 1%.

The TASE's late rally was spurred by a U.S. Institute for Supply Management report released on Monday that showed its index of national factory activity in June rose to 50.9 from 49.0 in May, a touch above of expectations of 50.5 and rebounding from an unexpected contraction in May.

Meanwhile, U.S. construction spending rose to its highest level in nearly four years in the month as a sharp rebound in public outlays offset a decline in investment in private nonresidential projects. Construction spending increased 0.5% to an annual rate of $874.9 billion, the Commerce Department said.

TheDow Jones Industrial Average shot up more than 160 points in a broad advance to 15,071.89. The S&P 500gained 1.2% to 1,625.71, and the Nasdaq Composite added 1.5% to 3,453.01. In Europe, the broad FTSEurofirst 300 of leading regional companies rose 1% to a provisional close of 1,163.58.

In the Israeli bond markets, the Tel-Bond 20, 40 and 60 indices gained up to 0.13%, with Internet Gold bonds rising 1.3%, extending a 7% gain on Sunday. Internet entrepreneur Teddy Sagi agreed over the weekend to invest NIS 125 million in the company.

Government bonds, on the other hand, were lower. The 10-year shekel bond, which is not linked to inflation, dropped 0.36%, boosting its yield to 3.83%. The equivalent indexed bond finished unchanged, with yields at 1.62%.

In currency trading, both the dollar and the euro posted advances of more than 0.5% on the shekel. The greenback's Bank of Israel rate was set at NIS 3.6370, while the euro was set at NIS 4.7448. Nevertheless, currency trader FXCM said the market doubts incoming Bank of Israel Governor Jacob Frenkel plans to pursue a policy of weakening the shekel.

"Investors simply don't believe that he will practice an aggressive intervention policy opposite speculators, as his predecessor Stanley Fischer did," FXCN said, adding that the dollar is now trading in a NIS 3.60-3.65 range. "We need to wait for it to break out of one side or the other to see what happens next."

In an otherwise higher equities market Monday, Israel Chemicals was a standout loser. Its shares dropped 1.8% and led the most actives with NIS 91.5 million changing hands. ICL's latest woes are reporting declining global corn prices, which would reduce demand for its fertilizers, as well as continued uncertainty about how the government's Sheshinski committee will treat its royalty agreements on mining Dead Sea minerals.

The Israel Corporation, ICL's parent company, finished 1.4% lower.

Clal Biotech was the biggest loser among TA-100 shares, falling 3.5% after its Gamida Cell unit received a letter from the U.S. Food and Drug Administration saying it wasn't satisfied with the Phase III clinical trial completed in April for its StemEx treatment for hematological malignancies.

Delek Auto dropped 0.1% to close at NIS 35.13 in unusually heavy trading of NIS 42.4 million after Yitzhak Tshuva's Delek Group sold 1.16 million of its shares in the market at NIS 34.60 each. That was a 1.6% discount on Delek Auto's opening price. Delek Group rose 1.2%.

With reporting by Reuters.

AFP