The Tel Aviv Stock Exchange greeted the new government Tuesday with its highest close in more than a year and a half, almost confirming departing Finance Minister Yuval Steinitz's remarks that he left the economy in better shape than when he took office.
The blue-chip TA-25 index was buoyed by insurance stocks to end 0.4% higher at 1,248.96 points, its highest level since July 2011. The broader TA-100 gained 0.6% to 1,111.86. Turnover topped NIS 1 billion.
The TA-Insurance index jumped 3.1% to 1,337.60, with all five companies posting strong gains: Phoenix 5.3%, Clal Insurance 4.1%, Menorah 3.4% and Migdal 2%. Harel, which advanced 2.8%, said its 2012 net profit climbed to NIS 448 million from NIS 218 million the year before, its best showing since 2009.
The TASE's performance provided a stark contrast to global markets for the second day running; shares in Europe and the United States extended the previous day's decline on continued concerns about Cyprus' economy.
A government spokesman said Cyprus' parliament was likely to reject plans agreed by euro zone officials over the weekend to part-fund a 10-billion-euro rescue of the island by seizing between 6.75% and 9.9% of bank deposits at Cypriot banks.
"This could be a flash in the pan, but it is a reminder to investors that the situation in Europe is not resolved. It could be the start of a spring correction, just as we saw in 2011 and 2012," Andrew Milligan, global head of strategy for Standard Life Investments in Edinburgh, said in a note.
London's FTSE 100 slipped 0.4% and Paris' CAC-40 dropped, 1.3% while Frankfurt's DAX fell 0.9%. MSCI's measure of global stock markets was off 0.5%. In the United States, the Dow Jones Industrial Average was down 0.36% at midday to 14,399.34.The euro fell 0.4%, hitting a session low against the dollar.
In local foreign currency trading, the dollar weakened about 0.3% to a Bank of Israel rate of NIS 3.6820, while the euro lost close to 0.2% to NIS 4.7665.
"The dollar-shekel rate is holding steady inside a range between its low of NIS 3.66 and approximate level of NIS 3.7. Only a breakout from inside this range will determine where it goes next," said currency trader FXCM. "An escalation of the Cyprus crisis is expected to increase demand for the dollar as a safe asset, which will also lead to a rise in the dollar-shekel rate."
Holding company Clal Biotechnology tumbled 5.6%, making it the biggest loser among TA-100 stocks for the session and bringing its decline over the past 12 months to 33%. The biotech investor said Tuesday it planned a NIS 200 million rights offering to support its development program. It also reported a narrowing of its fourth-quarter loss to NIS 12.3 million from NIS 90.2 million a year ago.
Among other big decliners, Ituran, which makes vehicle-location technology, fell 3.1%. Meanwhile, online translation company Babylon tumbled 3%, Compugen dropped 2.2% and Ceragon, a maker of wireless backhaul gear, fell 1.8%.
Mellanox, the semiconductor company, dropped 1.7% in heavy trading of NIS 36.2 million.
Among top gainers, real estate developer Airport City jumped 8.7%. Companies in Gershon Zelkind's group rallied, with Elco Holdings up 5.9%, Electra up 5.3% and Electra Consumer up 4.3%. Israel Chemicals led the most actives as NIS 57.1 million shares changed hands on a 1.6% rise.
Willi-Food, the food importer, rose 1.2% after the company said fourth-quarter net profit rose nearly six-fold to NIS 20.8 million while sales increased 30% to NIS 76.6 million.
With reporting by Reuters.