Market Report

Tel Aviv Shares Extend Their Gains on Syria Quiet

Bank of Israel intervenes to prop up a weak dollar, leaving it 0.6% stronger at NIS 3.616.

Tel Aviv share and bond prices extended their gains Monday, as prospects of a United States attack on Syria appeared to be fading.

The TA-25 index of blue chips marked its fourth straight session higher, closing up 0.4% to 1,191.10 points on turnover of NIS 1.09 billion. The broader TA-100 index advanced 0.5% to 1,090.82.

Insurance stocks again led the rise, with the TA-Insurance index adding 1.4% to 1,394.19, led by a 1.9% rise for Migdal. Menorah, Harel and Clal Insurance all climbed 1.5%.The biggest loser on a sectorial basis was telecommunications, weighed down by Bezeq's 1.6% fall. Cellcom Israel was up 0.4% at the close, even though it announced on Monday that it had formally recognized that its employees were now being represented by the Histadrut labor federation.

Wall Street was closed for the Labor Day holiday, but other world markets were higher on the Syria delay, as well as on improving economic data from China and Europe.

The purchasing managers index for China indicated activity in the country's vast manufacturing sector was at its highest in more than a year, easing investor concerns that the world's No. 2 economy was on course for a sharp slowdown this year. Recent signs of improvement also continued in the euro zone, where factory activity rose at its fastest pace in over two years, and in struggling Spain, where manufacturing grew for the first time since April 2011.

Europe's broad FTSEurofirst 300 share index was up almost 2% and on course for its biggest one-day jump since the start of July, as the data, which was particularly strong in the UK, also lifted sterling.

In foreign currency trading, the shekel was mixed. The dollar weakened to as low as NIS 3.59 before the Bank of Israel intervened to buy some NIS 200 million in foreign currency, reversing the greenback's direction and leaving it 0.6% stronger, at a Bank of Israel rate of NIS 3.6160. The euro advanced 0.7% to NIS 4.7805.

"While the dollar has strengthened globally as a safe harbor for assets, there is little doubt that among the world currencies, Israel's geopolitical situation vis a vis Syria puts the shekel at high risk," said currency trader FXCM.

Among the biggest gainers in Monday's trading, Ormat Industries advanced 3% and Electra 2.9%, while Yitzhak Tshuva's holding company, the Delek Group, added 2.6%. Ormat reported that Migdal last week acquired some 60,000 shares of its Ormat Technologies unit, which is traded in New York.

Super-Sol rose 0.3%, after Israel's biggest food retailer announced on Sunday after trading closed that it had re-filed to raise as much as NIS 5 billion in new debt. Discount Investment Corporation, a Nochi Dankner-controlled holding company, dropped 3.6%, making it the biggest loser among TA-100 stocks for the day. Discount completed a NIS 329 million bond offering. The sale was an expansion of a NIS 224 million sale from July of its Series Vav bonds, bringing its total fundraising to NIS 553 million.

Among the other big declines in Monday's session, Lev Leviev's holding company Africa Israel slumped 2.3%, Property & Building, the real estate development unit of Dankner's IDB group, dropped 2.1%; and the life science holding company Clal Biotechnology lost 1.8%. Idan Ofer's holding group, The Israel Corporation, was down 1.,6% by the closing.

Reuters contributed to this report.

Ariel Schalit