The Tel Aviv Stock Exchange marked another day of declines yesterday, following the bearish trends in global markets on growing concerns that the U.S. Federal Reserve could surprise investors by scaling back its stimulus as early as next week.
The benchmark TA-25 index dropped 0.9% by close, to 1,315.07 points while the broader TA-100 index shed 0.5%, to 1,180.52 points. Turnover was a thin 725.4 million shekels.
Bank stocks were hardest hit, dragging the Banks-5 index down 1.1%, to 1,272.42 points. Mizrahi Tefahot Bank ended 1.4% lower, Bank Leumi closed down 1.3% and First International Bank of Israel lost 1%. Bank Hapoalim, the day’s most active stock, with 43.1 million shekels changing hands, dropped 0.9%.
Stronger-than-expected U.S. data and a budget deal in Washington have brightened the outlook for the U.S. economy but are causing jitters in equity markets, which have benefited from ample central bank liquidity. The current Thomson Reuters consensus among economists is still for the Fed to begin withdrawing stimulus in March.
U.S. stocks ended little changed on Friday after a three-day drop but logged their worst week in nearly four months. The Dow Jones industrial average closed up 0.1% at 15,755.36 points, while the Standard & Poor’s 500 Index dropped 0.1% to 1,775.32 points and the Nasdaq Composite Index inched down 0.06%, to 4,000.98 points.
The pan-European FTSEurofirst 300 touched two-month lows and ended down 0.1% at 1243.47 points.
In foreign currency trading on Friday, the dollar lost more than 0.1% against the shekel to a Bank of Israel rate of 3.5030, even as the greenback hovered near a five-year high against the yen and rose against the euro on Friday. The euro also weakened against the shekel by 0.16%, to 4.8225 shekels.
In the fixed-income market, the price of the government’s 10-year shekel bond edged up 0.09% to trim its yield to 3.54% while its inflation-linked bond for the same periodfell 0.03%, raising its yield to 1.44%.
The TelBond-20, -40 and -60 indices dropped as much as 0.18%. Adgar, the real estate company, said the institutional tranche of its new Series Chet bonds drew order of 467 million shekel, twice the amount being sold. The interest rate was set at 3.5%.
Oil Refineries completed its bond offering, an expansion of its Series Alef debt. The inflation-linked bonds traded at 116.4 agorot, offering a yield of 6.5%, part as straight bonds and part as convertibles.
Perrigo, the world’s biggest maker of generic over-the-counter drugs, rose 2% after it said on Friday that the Irish High Court has approved its acquisition of Elan. Under the terms of the agreement, both Perrigo and Elan will become subsidiaries of a newly formed company called New Perrigo, whose shares will commence trading under on the TASE on December 22.
Opko Healthcare continued its slide, ending down 7.9% yesterday in response to a highly critical report from Lakewood Capital Management. Opko said it would meet in New York tomorrow with investors to present its case. “We are aware of the report, which we believe is based on distorted and inaccurate information,” the company said.
Among the other big losers in yesterday’s trading, Clal Biotechnology dropped 5.2% and Yitzhak Tshuva’s Delek Group declined 2%. Idan Ofer’s The Israel Corporation declined 5.2%. The Standard & Poor’s Maalot credit rating agency cut its rating on the holding company’s Zim unit to IlCC from IlCCC, saying the shipping company would likely have to reschedule its debt in the near term.
With reporting from Reuters.
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