Tel Aviv shares posted their third straight session of gains on Monday, as the TA-25 index broke through the 1,300 mark for the first time in close to two weeks. Biotechnology and communications shares led the rise.
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The benchmark TA-25 finished the day at 1,301.37 points, a gain of 0.6%, while the broader TA-100 rose 0.5% to 1,174.65. Turnover was a moderate NIS 1.08 billion.
"Even though the markets have seen a lengthy run-up, as long as interest rates and inflation expectations remain low, stocks will remain attractive, we believe," Harel Finance said, in a market commentary Monday. While Harel recommended diversifying equities portfolios globally, it said investors should increase their weighting to the U.S. technology sector, Europe and emerging markets.
Leading the biotech rally, Evogene rose 4.6% and OPKO Healthcare 4.3%.
Among smaller companies, Kadimastem soared 6.1% Monday after reporting that Merck Serono signed a memorandum of understanding aimed at advancing their stem cell-based drug screening collaboration initiated in 2012.
Can-Fite advanced 4.3% after it reported Monday that it signed confidentiality agreements with 10 multinational pharmaceutical and biotechnology companies regarding indications for its CF101 anti-inflammatory agent. Bio-Line closed 3.5% higher after it said Finnish regulatory authorizes approved phase 1-2 clinical trials of its BL-7010 celiac treatment.
U.S. stocks edged modestly higher mid-morning on Monday in the wake of data showing that business spending dropped sharply in September, and amid uncertainty over how soon the Federal Reserve would be comfortable enough with growth to begin scaling back stimulus. The Dow Jones industrial average edged up less than 0.1% to 15,628.41, the S&P 500 gained 0.1% to 1,763.33, while the Nasdaq Composite was steady at 3,921.841.
Expectations of monetary stimulus from the European Central Bank, coupled with a rise in HSBC, drove European shares to a five-year high Monday. The pan-European FTSEurofirst 300 index was up by 0.4% at 1,294.70 points in late session trading, having hit a high of 1,297.01.
In local foreign currency trading, the dollar and euro both strengthened against the shekel. The greenback advanced about 0.2% to a Bank of Israel rate of NIS 3.5330, while the euro added 0.13% to NIS 4.7726.
"Unless there is a concerted monetary and fiscal effort, the shekel will continue appreciating and hurt export profits, which will in turn hurt trade and raise unemployment," said Yossi Fraiman, CEO of Prico Risk Management & Investment. "A weakening of the shekel to above 3.65 to the dollar would serve as a short-term lifeline to Israeli industry."
In fixed-income trading, the Tel-Bond 20, 40 and 60 indices rose as much as 0.19%. The government's 10-year shekel bond rose 0.1%, while its 10-year inflation-indexed Galil bond advanced 0.23%.
Bezeq led the most active shares Monday, advancing 2.1% as NIS 68.2 million in shares changed hands. B Communications, the holding company controlled by Shaul Elovitch that controls Bezeq, was up 7.4% by close. Teva Pharmaceuticals continued lower, dropping 0.4% on turnover of NIS 54.8 million.
Space Communications, which operates the Amos satellites, rose for the second time in three days, after a string of losses in unusually heavy trading. Shares advanced 3.5% on turnover of NIS 40.2 million.
Among the top losers in the TA-100, Africa Israel Investments - Lev Leviev's real-estate holding company - ended 1.6% lower after spiking 16% on Sunday. Oil Refineries lost 4.2% and Allot Communications 2.3%.
Property developer Jerusalem Economy finished up 6.3% for the day. Babylon, the embattled online-translation company, ended higher for a second day running, adding 9.2% to its 5.6% rise Sunday. Its shares plummeted last week after Google announced it was ending its contract with Babylon.
Reuters contributed to this report.