Stock Market Applauds Election

The TASE’s benchmark TA-25 index rose as much as 1.8% in the early afternoon, before easing to finish at 1,205.65 points, a gain of nearly 1% for the day. The TA-100 ended 0.9% higher at 1,1070.17, with the rest of the market higher, except for technology and telecommunications shares.

Investors celebrated Tuesday’s election results Wednesday, as they looked forward to a centrist government capable of tackling the big budget deficit lying ahead.

The TASE’s benchmark TA-25 index rose as much as 1.8% in the early afternoon, before easing to finish at 1,205.65 points, a gain of nearly 1% for the day. The TA-100 ended 0.9% higher at 1,1070.17, with the rest of the market higher, except for technology and telecommunications shares. Turnover was a heavy NIS 1.14 billion.

“It appears that the blocs that have been created have reduced the chances of anyone forming a narrow right-wing (or left-wing) government or of a breakdown in the budgetary framework,” said Ofer Klein, head of economics and research at Harel Group.

“We should remember that there’s still a need to cut NIS 15 billion in order to meet the spending limits in the 2013 budget. ... The strengthening of the centrist parties increases the odds that the face of the budget will be changed to make it more supportive of economic growth.” In the foreign currency market, the shekel posted gains against the dollar and the euro. The greenback’s Bank of Israel rate was fixed at 3.7220, a loss of 0.4% for the U.S. currency, while the euro was set at 4.9695, weakening 0.2%.

“[Prime Minister Benjamin] Netanyahu will need to act quickly to preserve the budgetary framework and to encourage the growth engine, the high-tech industry and domestic demand,” said Yossi Friedman, CEO of Price Risk Management.

Technology shares were lower, with the BlueTech-50 down 0.7%. Semiconductor maker Mellanox, which was due to report its fourth-quarter.

Bloomberg