Market Report

Share Prices Post Sharp Gains, Led by Technology Stocks

Fitch pitches in by upgrading Israel's credit outlook to positive.

Shares rose sharply on the Tel Aviv Stock Exchange on Sunday, powered by a technology rally on Wall Street over the weekend and by news that credit rating agency Fitch had upgraded Israel’s credit outlook to positive.

The TA-25 index of blue chips reached another record high, advancing 1.4% to 1,377.79 points while the broader TA-100 rose 1.3% to 1,234.66. Turnover was NIS 837.8 million - relatively brisk for a Sunday.

Prices for government bonds rallied, too, with the 10-year shekel bond rising 0.3% to reduce its yield to 3.51%. Its inflation-indexed bond for the same period advanced 0.23% to cut its yield to 1.39%. Over the weekend, Fitch affirmed Israel’s foreign and local ratings to A and A-plus, respectively, and raised the foreign currency outlook to Positive from Stable.

In foreign currency trading on Friday, the dollar slipped 0.3% against the shekel to a Bank of Israel rate of NIS 3.523, while the euro weakened 0.15% to NIS 4.7969.

Most of the U.S. market dipped in thin Thanksgiving holiday trading on Friday, but the Nasdaq got a boost from the technology sector.

The Dow Jones industrial average fell 0.07% to end at 16,086.41 while the S&P 500 declined 0.08% to finish at 1,805.81. But the Nasdaq Composite index added 0.4% to close at 4,059.886, with Apple up 1.9% at $556.07, Microsoft gaining 1.4% and Amazon up 1.8% at $393.62.

That helped to lift the TASE’s two technology indices about 1.4%. Among the biggest gainers were the arbitrage stocks Elbit Systems, which rose 2%, and Nice Systems, up 2.3%. Even Babylon, whose share price has been pounded by lost contracts from Google and Ask.com, rose 3.5%.

Communications stocks also rallied, with the TA-Communications index jumping nearly 3% to 788.31. Bezeq and Cellcom Israel both rose 2.7% and Partner Communications went up by 4.5%

But at least one analyst expressed skepticism that small- and medium-cap stocks like Israeli tech shares would continue to rally in the coming days.

“It’s almost as if people are rotating into the bigger blue-chip names, especially the technology big caps. We wouldn’t be shocked at all to see the small- and mid-cap names lag a little bit,” said Ryan Detrick, technical strategist with Schaeffer’s Investment Research, in Cincinnati.

Camtek jumped 18.5%, exceeding an arbitrage gap with Wall Street. The company said last week it was in the advanced stages of developing its GreenJet 3D printing system, and expected its first trial installation at the beginning of 2014, followed by commercial sales later in the year.

Other big gainers were bank shares, with First International Bank of Israel closing 1.6% higher, Bank Leumi up 1.2% and Bank Hapoalim up 1.1%. Israel’s top five banks boosted their aggregate profit in the third quarter by 10% from a year ago. Leumi, the last of the lenders to report earnings, said over the weekend it boosted profit 16%.

Alternative energy company Enlight finished the day 15.1% higher after reporting that its third-quarter net profit grew 10-fold to NIS 7 million from a year earlier, while revenue climbed more than a factor of eight to NIS 88 million.

Reuters contributed to this report.

Bloomberg