Tech, Banks and Energy Lead Tel Aviv Stocks Higher

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Tel Aviv shares rose in active trading Tuesday, lifted by technology, banking and energy stocks, the latter buoyed by the latest good news at the Leviathan natural gas field.

The benchmark TA-25 index got off to a shaky start but gained steadily most of the day before pulling back in the final hour. It ended 0.7% higher at 1,28.99 points. The TA-100 rose 0.9% to close at 1,218.65. Turnover was a brisk 1.53 billion shekels ($436 million).

Energy shares jumped, with the TA-Oil and Gas index adding 2.2% to 1,295.72. Avner rose 1.5%, Delek Drilling 2.3% and Ratio 4.3%. The three publicly traded partners in the Leviathan gas field were buoyed by reports that Australia’s Woodside was prepared to pay more for a smaller stake in the field than it agreed to a year ago.

Technology shares were lifted by a 5.9% gain by Space Communications, the operator of the Amos satellites. Meanwhile, software maker Magic’s climbed 4.7% and EZchip and Mazor Robotics each rose 4.6%.

Bank shares were led by Israel Discount Bank’s 2.6% advance, while Bank Leumi and Bank Mizrahi-Tefahot rose 1.7% and 1.1%, respectively.

U.S. stocks rose Tuesday, putting the S&P 500 on track for its first positive session of 2014 as equities rebounded following a three-day decline.

In late morning New York time, the Dow Jones industrial average was up 0.7% at 16,544.01. The Standard & Poor’s 500 Index had added 0.6% to 1,838.33 and the Nasdaq Composite Index 0.9% to 4,151.21.

A flat open on European stock markets turned positive after Germany reported an unexpected drop in unemployment, with gradual gains leaving London’s FTSE 100 Index up 0.4% at 6,755.45.

In local foreign currency trading, the dollar edged 0.03% lower to a Bank of Israel rate of 3.5010 shekels while the euro strengthened about 0.2% to 4.7769 shekels.

Yossi Fraiman, CEO of Prico Risk Management, said he was concerned about the government’s exchange-rate policy after hearing Bank of Israel Governor Karnit Flug’s remarks to the Knesset Finance Committee on Monday.

“It raises fears that economic policy isn’t sufficiently formulated and is making us go in the wrong direction,” he said.

In the fixed-income market, the Tel-Bond 20, 40 and 60 indexes ended little changed. The government’s 10-year shekel bond rose 0.09%, trimming its yield to 3.64%. Its inflation-linked bond for the same period also rose 0.09% to a yield of 1.49%.

Pluristem rallied for a second day, rising 7.6% to make it the biggest gainer on the TA-100, after it said Monday the results of its Phase I/II clinical trial of its Placental Expanded cells for treating muscle injuries would be presented January 21.

Compugen rose 2% after it said Tuesday it was increasing research and development in immune oncology. The company will boost its R&D budget 60% to $16 million this year, a figure it can fund given its $50 million on hand.

Teva Pharmaceutical Industries rose 1.1% on turnover of 108.7 million shekels, the most active share of the day. RBC Capital Markets started coverage of the stock with a Sector Perform rating.

The Wall Street Journal’s “Heard on the Street column” featured Teva on Monday, mentioning the unknowns facing the company. But it added: “Teva is cheap: The stock trades at about eight times forecast earnings, well below generics peers at 12 to 13 times, which themselves trade well shy of the pharmaceuticals sector. If Teva’s cost cutting goes according to plan, that discount shouldn’t widen much.”

Among the biggest losers Tuesday, Israel Chemicals and Super-Sol each dropped 1.4%, and Opko Health shed 1%.

With reporting by Reuters.

A rig at the Leviathan natural gas field. Credit: Albatross

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