Market Report / Syria Comes Back to Haunt the Stock Market

Insurance, bank and communications stocks, the same losers as during the previous Syria scare, ended the day significantly lower.

Nervousness over a possible U.S. attack on Syria came back to haunt the Tel Aviv Stock Exchange on Sunday, sending shares and bonds broadly lower on the first day of trading of the Jewish new year.

The market may also have been concerned about violence in Egypt, where the army launched an attack against Islamist militants in north Sinai on Saturday, killing at least nine people.

Resuming trading after a two-day break for Rosh Hashana, the benchmark TA-25 index ended the day down 1.2% at 1,165.42 points, after dropping in the morning, steadying at mid-day and then taking another slide lower in the final hours of trading. The TA-100 index was also down 1.2% at 1,068.52. Turnover for a Sunday was a relatively brisk NIS 723.3 million.

The declines were broad, but focused on the same sectors that suffered in the first round of Syria anxiety at the end of August. Finance shares were down more than 2%, led by drops of 3.7% for Harel Insurance, 3.2% for Menorah and 3.1% for Clal Insurance. Among banks shares, Leumi finished down 2.7% and Israel Discount Bank down 2.6%.

Another big casualty was the communications sector, with the TA-Communications index down 2% at 659.25. Partner Communications posted the biggest drop among TA-100 shares, tumbling 4.5%.

Energy stocks also slid, with the TA-Oil and Gas index down 1.2% at 1,177.24 points, despite a surge in shares of Shemen Oil & Gas on signs of "significant" oil finds at its Yam 3 well (sees story on this page). That was offset by sharp declines for the Bloc 12 partners, after they reported technical problems at the natural gas well on Sunday. Delek Drilling fell 2.4% and Avner 1.7%, while their parent company Delek Group, dropped 2.5%.

U.S. stocks closed little changed in choppy trade on Friday, after labor market data removed some uncertainty about Federal Reserve policy. But concerns remained about possible military action by the West against Syria.

The Dow Jones industrial average fell 0.1% to 14,922.5, the S&P 500 ended virtually unchanged at 1,655.17 and the Nasdaq Composite edged up 0.03% to 3,660.01. In foreign currency trading, the dollar slumped against major currencies on Friday on the U.S. job report. The shekel didn't trade on Friday due to the Rosh Hashana holiday.

On the TASE, bonds were also lower, with the Tel-Bond 20, 40 and 60 indices down as much as 0.4%. The government's 10-year Shahar bond fell 0.3% to bring its yield to 4.1%, its highest level since April. Its inflation-indexed bonds for the same period declined 0.22% to lift their yields to 1.92%.

Other big losers in Sunday's trading were Oil Refineries Ltd. (Bazan), which declined 4% on concerns that refining profits were due to fall. Its parent company, The Israel Corporation, dropped 3%, bringing its fall since the start of 2013 to 45%.

Reuters contributed to this report.

AFP