The Tel Aviv Stock Exchange closed Tuesday's trading session with gains despite morning losses in Asia and negative arbitrage gaps vis-a-vis Israeli stocks on Wall Street. Local shares were pulled upward by a strong positive trend in Europe that lasted throughout the day, amid traders’ anticipation that the Euro bloc would slice its interest rates.
The local exchanges opened the trading session with losses of up to 0.5% but rebounded to close with gains. The blue-chip Tel Aviv-25 Index gained 0.5% to close at 1,208 points, while the broader Tel Aviv-100 Index gained 0.6% to close at 1,080 points. The Real Estate-15 gained 0.7%, while insurance and financial shares led the list of gainers: The Banks-5 gained 1.45%, and the index of insurance shares closed up 1.3%. Total turnover was NIS 777 million.
On the international scene, European shares posted their biggest one-day gain in seven months, while the euro hit a two-week low against the dollar after weak German data sparked speculation the European Central Bank could cut interest rates. On Wall Street, shares surged on strong corporate earnings and were on track for a third straight day of gains.
In Asia, Japan’s Nikkei share average slipped as weak China manufacturing data heightened concerns over global growth, while investors cashed in some of the recent gains after the yen’s slide toward 100 to the dollar stalled.
Back in Tel Aviv, notable shares included the translation software company Babylon, which gained 5.8% after announcing in the morning that it had signed a cooperation agreement with the Internet giant Yahoo. The company is trying to decrease its dependence on the search engine titan Google.
El Al regained 7.1% after falling sharply earlier this week. The company has been in the middle of a firestorm amid the cabinet’s decision to push through the Open Skies agreement with Europe, which gradually exposes Israel’s national airline to competition. The company was on strike Sunday and part of Monday but resumed operations after reaching a deal that has the state covering 97.5% of its security expenses, up from 70%.
Hadera Paper gained 4.2% after announcing in the morning that it had signed an agreement switching its natural gas supplier from the dwindling Tethys Sea offshore reserve to the brand new Tamar reserve as of May. Gas from Tamar will cost the company less, with expected savings totaling NIS 1.8 million a year.
IDB group shares also continued to draw attention. Controlling shareholder Nochi Dankner is in Argentina in an effort to secure a $75 million investment from Eduardo Elsztain. IDB Holding’s share price rallied by 2.5% Tuesday.
Meanwhile, it appears public criticism of executive salaries is having an impact on IDB group companies. Supermarket chain Super-Sol, which is controlled by Discount Investments, announced Monday night it was dropping a planned discussion of a NIS 1.3-million grant to CEO Itzik Abercohen from its shareholders meeting scheduled for April 25. The grant would have been for the year 2012. Super-Sol’s share gained 3.9% Tuesday.
With reporting by Reuters.