Market Report

TA-25 Crosses 1,300 for First Time Since May 2011

Signs of compromise over U.S. debt ceiling breathe new life into Tel Aviv index.

The Tel Aviv Stock Exchange's benchmark TA-25 index crossed the 1,300 mark for the first time since May 2011 on Tuesday as investors looked forward to a compromise in Washington over the U.S. debt ceiling.

After a mostly lackluster session, the index of blue chip stocks rallied toward the end of the day to finish up 0.6% at 1,302.95 points on turnover of NIS 1.41 billion. The broader TA-100 index ended 0.5% higher at 1,173.47.

Tel Aviv joined a global rise in equities markets on Tuesday amid signs of progress in Washington's budget and debt talks, though U.S. stocks edged lower on Citigroup's weaker-than-expected quarterly earnings

"The feeling is that a compromise will be reached in the United States on the debt ceiling that will enable the government to reopen temporarily," said Shay Shemesh, senior investments manager at Helman Aldubi. "The two sides have an interest in compromising - the president, so he can present himself as the nation's savior; and the Republicans, to stop a plummet in support because of the stance they have been taking."

In late morning trading, the Dow Jones industrial average was down 0.09% at 15,286.81. The Standard & Poor's 500 Index was down 0.02% at 1,709.80 while the Nasdaq Composite Index was up 0.14% at 3,820.77.

The FTSEurofirst 300 was up 0.8% at 1,262.50 points by 1515 GMT, led by miners and autos. MSCI's world equity index, which tracks shares in 45 countries, was up 0.1%, close to a five-year high hit in September prior to the crisis in Washington.

The dollar rose to touch a one-month high against a basket of currencies, also buoyed by the optimism over possible progress in Washington. Against the shekel, the greenback advanced 0.25% to a Bank of Israel rate of NIS 3.5460. The euro weakened 0.25% to NIS 4.7852.

OPKO Healthcare, the U.S.-based medical company that joined the TASE earlier his month, jumped 1.49% on turnover of NIS 43.3 million, lifting the TA-Biomed index 1.3% to 1,063.70. Among other biotech companies, Canfite gained 9% after Elsevier Business Intelligence named its CF101 among the Top Autoimmune/Anti-Inflammatory Disease Projects to watch. Compugen gained 3.2%.

Teva Pharmaceuticals posted its first daily drop since it announced a plan to trim $2 billion in costs. The share dropped 1.3% on turnover of NIS 1.41 billion, making them the most active of the session. Among the biggest losers in the TA-100 index, defense electronics maker Elbit Systems dropped 3.3% and biotech company Kamada lost 2.7%.

The energy sector, which was hit hard on Monday by news that Shemen Oil & Gas had hit a dry well at its Yam 3 drilling, recovered on Tuesday. Shem itself finished ahead 5.5%, Modiin added 9.2% and Zerah 6.25%.

Oil Refineries Limited continued to tank, losing 9.4% on Tuesday as it struggles under the weight of debt and two quarters of losses. The company, which is part-owned by The Israel Corporation, is seeking a debt rescheduling with its bank creditors. Israel Corporation closed 2.2% lower.

Electra Real Estate rose 1.6% after it reported on Tuesday that it sold another property in Canada for the equivalent of NIS 56.3 million as it stocks up on cash to meet NIS 320 million in debt repayments over the next several months.

Reuters contributed to this report.

Bloomberg