Market Report

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

Brisk trading in new entry Opko Health lifts TASE turnover to NIS 3.12 billion

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.

Dan Keinan