Tel Aviv shares extended their gains for a second day in unusually heavy trading as Syria war worries receded. The dollar and euro reversed course after three days of strong gains to weaken sharply against the shekel.
"The atmosphere of tension and uncertainty in the market has come down a bit ahead of the weekend following reports of a possible delay in the American attack," said Nir Peleg, CEO of Kryptonite Hedge Funds. "As long as the U.S. operations are being delayed, its negative impact in the markets will subside."
But, Peleg warned, that the market would not really recover until it was clear that the U.S. attack would not occur. The market is still down 1.5% to 2% from levels before the concerns began at the start of the week. "The Tel Aviv market as should be expected reacted very strongly to the uncertainty and winds of war and it shouldn't be expected to fully correct from the sharp drops," he said.
The benchmark TA-25 index finished the session yesterday up 1.2% ayt 1,178.41 points, with the broader TA-2100 up 1.1% at 1,081.68. Turnover nearly reached NIS 2 billion, in part lifted by the expiry of the August Ma'of (TA-25) contract in the morning.
Global stock markets were also higher in response to signs of a delay in expected Western military strikes on Syria. Even though investors remained on edge over potential turmoil in the Middle East, they were cheered by strong growth in the U.S. economy where data showed the American economy grew more quickly than expected in the second quarter, and weekly claims for unemployment benefits fell.
In late morning New York time, the Dow Jones industrial average was up 0.5%, at 14,901.45, the Standard & Poor's 500 ahead 0.6% at 1,644.75 and the Nasdaq Composite Index up 1% at 3,629.90. The FTSE Eurofirst 300 index of top European firms was up 0.8% 1,207.52.
The TASE's gains on Wednesday and Thursday, however, couldn't offset the decline of Sunday, Monday and Tuesday. For the week, the TA-25 index ended down 1.9%, pushing its year-to-date performance into negative territory. The TA-100 was off 1.2% for the week but remained up 3.1% for the year so far. Energy shares were hit hardest this week, with the TA-Oil and Gas index down 4.2% 1,181.95
In foreign currency trading, the dollar lost 1% of its value to a Bank of Israel rate of NIS 3.6300 while the euro advanced more than 1.8% to NIS 4.8133. Nevertheless, the greenback is still worth about 2.8% more against the Israeli currency than it was in mid-August.
Bond prices also enjoyed a rebound yesterday. The government's Shahar bond of 10 years rose 0.24% to cut its yields to 4.01%, although inflation-indexed debt traded mixed. The Tel-Bond 20, 40 and 60 indices gained as much as 0.22% after two days of declines.
Bank shares led the market higher after Bank Hapoalim and Bank Leumi both turned in big gains in second-quarter profits, even if Leumi failed to meet analysts' expectations. Hapoalim finished the session up 3.6% and Leumi up 2.7%.
Telecommunications shares also advanced smartly, with Bezeq jumping 4.8%, Partner Communications 2.2% and Cellcom Israel 2%.
Prolor Biotech topped the most actives on Thursday, with NIS 133 million shares changing hands on a 15% decline. OPKO Healthcare announced on Thursday that its takeover of Prolor was completed and that the share would be delisted as of next month.
Reuters contributed to this report.