Tel Aviv stocks finished mixed on Wednesday as European markets rebounded from the doldrums of the day before, in a rally boosted by bank stocks. Also, investors seem to have gotten beyond the shock of the Greek government handing over decisions to referendum.
Ayelet Nir, chief strategist at Psagot, explains that Europe and the world are waking up from the illusion of the Greek rescue plan approved last week, which has boosted demand for risk-free assets.
"The Greek prime minister has difficulty deciding what's worse," Nir said, "staying in the euro bloc and taking the aid, and cutting budgets again and again - or announcing bankruptcy, leaving the euro bloc, depreciating the currency and dealing with serious financial crisis." So he's letting the public decide, Nir said.
While the Tel Aviv benchmark TA-25 index and the broader TA-100 index both lost 0.1%, London stocks gained 1.3%, French shares added 1.4% and German equities gained nearly 2%. Total turnover on the Tel Aviv Stock Exchange was thin at NIS 1.3 billion. The local session had been quite volatile, as the leading indexes flipped back and forth over the flatline.
Here the story of the day was Teva Pharmaceutical Industries, which fell after reporting a drop in profit for the third quarter of 2010 - but still beating expectations. Given Imaging stock jumped 6% after the company reported a 16% increase in third-quarter revenues to $44.7 million and adjusted profit (ex-nonrecurring items ) of $5.3 million. Net profit came to $3.2 million. Magic Software shares gained 11.3% after the company reported a 34% leap in sales to $30 million in the third quarter, and a 60% jump in adjusted profit to $4 million.