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U.S. Crisis Behind TA-25 Dive in Late Trading

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The growing fiscal crisis in the United States pulled the rug out from under Tel Aviv shares Thursday, sending the benchmark TA-25 index sharply lower in the final hours of trading.

The index of blue chip stocks ended the session down more than 1.1% at 1,257.64 points, while the TA-100 lost 1% to 1,136.91. Turnover ballooned to NIS 3.12 billion in large part due to heavy trading in Opko Health and to a lesser extent in Teva Pharmaceuticals.

Some NIS 787 million shares in Opko had changed hands on Sunday, with the price ending more than 10% higher as exchange-traded funds scooped up the stock to put their portfolios in alignment with the TA-25. Opko, which began trading on the TASE last month after it acquired Prolor Biotech, joins the index as of next week.

Teva rose 1.5% on turnover of NIS 283.8 million. The company said Thursday that a 20-year study of the efficacy of the key ingredient in its best-selling multiple sclerosis drug Copaxone was a success. Teva said the study was the only one ever conducted for such a length of time for any MS drug.

Major world stock markets fell while the dollar dropped to an eight-month low Thursday as there appeared no end in sight to the budget fight in Washington that has shut down the government for a third day.

Worries also grew about the more important battle over the U.S. debt ceiling in coming weeks, sending U.S. one-month Treasury bill rates to their highest level since November. Failure to raise the $16.7 trillion borrowing limit by October 17 will lead to a U.S. default and roil global markets.

Dow Jones edges down

In late morning trading New York time, the Dow Jones industrial average had dropped 0.9% to 15,004.41 while Standard & Poor's 500 Index fell to 1,679.03. The Nasdaq Composite Index was off 0.8% at 3,784.33.

In Europe, the FTSE EuroFirst 300 dropped 0.5% to 1,241.52 points.

Although the TASE ended almost unchanged this week against the background of the U.S. crisis, TASE figures for September were among the best ever for the bourse. The TA-25 climbed 7.3% in the month, even though there were fewer trading days due to the High Holidays, bringing its year-to-date return to 6.7%. The leading indices so far this year are the TA-Communications index with a 53% gain and the TA-Midcap 50 index with a 37% rise.

In local foreign currency trading, the shekel defied world trends, with the dollar edging up 0.09% to a Bank of Israel rate of NIS 3.5370. The euro strengthened 0.75% to NIS 4.8124.

Among key stocks in Thursday's session, Given Imaging slumped 1.9%. Discovery Group, which holds about 4% of the stock in the maker of a ingestible camera for diagnosing digestive ailments, said Given should give back shareholders $50 million of the cash it is sitting on and resume efforts to find a buyer. Discovery said Given shares could be worth as much as $30, versus the $19.31 they were trading at on Nasdaq late Thursday morning.

Clal Industries rose 1.5% after shareholders approved a NIS 1.27 billion offer by controlling shareholder Access Industries to buy their shares and delist the conglomerate. Investors will get NIS 15.80 a share.

Colpan jumped 1.62% after a Chinese-owned company, Trauwin Pty, agreed to take a 10% stake in the medical-device maker for $2.5 million. The price worked out to 53 agorot, compared with an opening price yesterday of less than 33 agorot.

Reuters contributed to this report.

Watching the Tel Aviv stock market.Credit: Dan Keinan

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