Market Report / TASE Gains After Holiday Weekend

German election results and Fed’s stimulus program helping to buoy the market

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The Tel Aviv Stock Exchange looked at the glass as half full yesterday as traders ignored an impending U.S. debt crisis and political chaos in Italy to bid up shares after a long holiday weekend.

The benchmark TA-25 index finished the day up 1.2% to 1,270.93 points while the broader TA-100 added 1.1% to 1,147.99. Turnover was NIS 1.01 billion, unusually brisk for a Sunday, when foreigners are absent from trading.

Technology shares were especially strong, with the TA-BlueTech 50 jumping 2.4% as dual-listed shares on Wall Street posted big gains over the long Sukkot holiday weekend. Among them the biggest gainers were AudioCodes which soared 12.6%, EZchip which added 10%, Mazor Robotics with a 6.1% gain and Protalix, which added 5.4%.

Concerns about a U.S. government shutdown at midnight Monday caused U.S. stocks to decline on Friday. The Dow Jones industrial average was down 0.5% at 15,258.24 while the Standard & Poor's 500 Index lost 0.4% to 1,691.75 and the Nasdaq Composite Index lost 0.2% to 3,781.59. For the week, the Dow was down 1.3% and the Nasdaq was up 0.2%.

In Europe, Italy's political crisis as well as U.S. debt worries helped drag equities lower on Friday. The broader STOXX Europe 600 index fell 0.3% to 312.18 points.

Concerns about an impending government shutdown only grew stronger yesterday as the U.S. House of Representatives approved an emergency spending bill that put it on a collision course with the Democrats in the Senate and with the White House. But on the TASE, investors were more focused on Angela Merkel's big election victory in Germany and the U.S. Federal Reserve's plan to continue pumping money into the economy.

"The election in Germany and the Fed's stimulus program are continuing to support the markets," said Assaf Shaul, deputy CEO for investments at Alfa Platinum Mutual Funds. "The market should continue to be positive due to the continued stimulus program in the U.S. and a further drop in geopolitical risk on the Iranian front."

In foreign currency trading on Friday, the dollar gained more than 0.3% on the shekel to a Bank of Israel rate of NIS 3.5710. The euro also gained about 0.3% to NIS 4.8200.

In TASE equities trading, Israel Chemicals jumped 5.8% with NIS 89.4 million in shares changing hands after Belarus President Alexander Lukashenko said that potential investors in the Russian potash company Uralkali want to restore the global potash cartel, a move that would lift global prices for potash, ICL's main product. ICL's parent company, The Israel Corporation, rose 4.5% on turnover of NIS 26 million.

In the fixed-income market, the Tel Bond 20 index edged up 0.08% and the Tel Bond-Shekel gained 0.13%. The Kardan NV Series B2 bonds fell 2.8% to raise their yield to 39%. Government bonds registered gains, with 10-year unlinked bonds rising 0.31%, lowering the yield to 3.74%. Inflation-linked bonds for the same term were steady at a 1.62% yield.

Elbit Systems jumped 5.5% on news that its U.S. subsidiary had won a $44.8 million five-year service and support contract for U.S. Marine Corp's Super Cobra helicopters. The company said it expects further orders as part of the contract.

Hadera Paper dropped 0.9% after Turkey's Supreme Court ruled that its subsidiary must pay $20.2 million in value-added tax. Hadera Paper said it intended to appeal the decision but warned that it might in the meantime take a charge against its earnings.

Harel Insurance gained 3.1% after it reported yesterday it had purchased 49% of a central London office building for approximately 115 million pounds (about NIS 655 million).

Reuters contributed to this report.

Tel Aviv Stock Exchange. Credit: Ofer Vaknin

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