Market Report / TASE Ends Mixed After Key Fed Decision

Global markets took the Federal Reserve's $10 billion reduction in monthly stimulus bond purchases well.

Tel Aviv shares trended higher most of the day, but lost their momentum in the final hours of trading to end mixed, a day after the United States Federal Reserve announced it was reducing the size of its bond-buying stimulus program.

The benchmark TA-25 index ended the session off 0.15% at 1,323.04 points, while the broader TA-100 eked out an 0.02% rise to finish at 1,195.46. Turnover was a relatively heavy 1.46 billion shekels.

For the week, the TA-25 edged 0.3% higher to bring its year-to-date gain to 11.6%. The TA-100 was up 0-.8% for the week and is now at 14% for 2013. The leading sector was insurance, where the TA-Insurance index advanced 4% for the week, bringing its 2013 return to 25%.

The global markets took the Fed’s $10 billion reduction in monthly stimulus well on Wednesday, after months of agonizing over when it would begin cutting the bond-buying program that has helped underpin gains in riskier assets such as equities and commodities.

European stocks rallied on Thursday, with the pan-European FTSEurofirst 300 up 1.5% to 1,277.66 points at mid-afternoon, after earlier rising to 1,280.51, its highest point since early December. The Euro STOXX 50 was up 1.6 percent, at 3,022.72 points.

“Investors are glad to see that the bond purchases can be thinned out and even halted, while signs of a strengthening economy have planted seeds of cautious optimism,” said Nir Peleg, CEO of the fund manager Kryptonite.

In New York, however, shares were moderately lower on Thursday in late morning trading New York time. The Dow Jones industrial average was down 0.2% at 16,143.73, the Standard & Poor’s 500 was off 0.3% at 1,804.56 and the Nasdaq Composite down 0.4% at 4,055.432. U.S. government bonds sold off sharply.

In foreign currency trading, the dollar also benefited from the Fed announcement. It jumped 0.26% against the shekel to a Bank of Israel rate of 3.5140 shekels. The euro slumped 0.25% to 4.8075.

In spite of the mixed equities trading on Thursday, quite a number of stocks enjoyed strong gains. TowerJazz, the semiconductor maker, soared to an 8.75% close, after reporting that a unit of the Wells Fargo & Company bank had awarded it a $70 million credit line through December 2018 at a reduced interest rate. 

Gilat, the maker of satellite transmission equipment, ended 6% higher, after winning two big Latin American contracts (see story on page 8) worth close to $130 million. Scailex, Ilan Ben-Dov’s holding company, finished 2% higher after he reached an agreement with his bondholders to delay payment on 1.3 billion shekel of debt for three years, in exchange for a higher rate of interest and other concessions.

Migdal Insurance rose 2.3% on turnover of 128.5 million shekels, making it by far the most heavily-traded share of the day.

Biomed stocks also were higher on a spate of news reports.

Mazor Robotics added 5.2% after reporting that it received its first order for a Renaissance survival robotics system from its distribution partner in Turkey. Can-Fite, which is developing treatments for inflammatory and cancer diseases, closed 6.3% up after it said on Thursday that the it had been granted a U.S. patent for a biomarker to predict patients’ response to CF101 in autoimmune inflammatory indications.

Reuters contributed to this report.

Reuters