A massive sell-off of Bezeq shares pushed the Tel Aviv Stock Exchange's benchmark index lower yesterday. Bank stocks also slid, as did shares of the online translation company Babylon.
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The TA-25 index of blue chips ended down nearly 1.5%, at 1,289.33 points below the psychological barrier of 1,300 points, as some NIS 1.15 billion shares changed hands. The broader TA-100 index fell 1.3%, to 1,166.67 points. All the sectorial indexes ended lower, with the exception of the TA-Oil and Gas index, which ended steady.
Bezeq, whose shares have enjoyed a powerful rally this year, ended the day down 7.2%, at NIS 6.20, on turnover of NIS 179.7 million, by far the highest of the day after Citibank lowered its rating for the stock to Sell from Neutral and raised its target price to NIS 5.40 from NIS 4.26.
We have seen it before: a stock rallying ahead of a major change in the competitive environment, analyst Michael Klahr said a note to clients. We may be early to this call but think that this could be the last hurrah for Bezeq shares ahead of new fixed competition.
Other companies controlled by Shmuel Elovitz, Bezeq's main shareholder, also tumbled. Internet Gold was down 20.6% and his holding company B Communications lost 15.6%. The TA-Communications index finished 5.7% lower at 760.46 points.
Global equity markets fell yesterday on mixed corporate results and concerns that new scrutiny of euro zone banks could prove costly for its weaker members,.
On Wall Street, the Dow Jones industrial average was down 0.6% at 15,381.15 points in late morning trading New York time.
European shares snapped a nine-day winning streak, hit by plans for a new, tougher stress test for euro zone banks, as well as by a crop of weak earnings numbers and forecast downgrades in other sectors. The STOXX Europe 600 Banks index dropped 2.2%, suffering its worst day in two months.
The dollar weakened 0.2% against the shekel to a Bank of Israel rate of NIS 3.5200. The euro gained 0.3% to NIS 4.8901.
In TASE bond trading, the Tel-Bond 20, 40 and 60 indexes posted losses of up to 0.13%. Government bonds were mixed. Ten-year, inflation-linked Galil bonds edged down 0.1% while 10-year shekel bonds advanced 0.06%.
The rout in share trading extended to the banking sector as well. Bank Hapolaim dropped 2.2% by the end of the day on turnover of NIS 86 million. First International Bank of Israel finished 2% lower, Israel Discount Bank lost 1.5% and Mizrahi Tefahot 1%.
Biotechnology shares were also sharply lower, the TA-Biomed index down 2.7% to 1,033.47 points. Holding company Cal Biotechnology led the way down, with a 6.8% drop. Kamada was off 4% and Photomedix lost 3.7%. Can-Fite plunged 12.4% after it filed a shelf offering yesterday to raise capital to boost its equity ahead of a planned issue of American depository receipts.
In the energy sector, Delek Group extended its gains following a High Court of Justice ruling on natural-gas exports, adding 1.6%. But its partners in the Leviathan field, Ratio, continued going lower, falling 1.7%. Modiin declined 5.3% and Shemen 4.7%.
Noam Pinko, nevertheless, said shares of Ratio and its Leviathan partners have room to rise. He assigned Ratio a target price of 545 agorot, versus a 46 agorot closing price yesterday. Delek Drilling, Pinko said, could reach NIS 20.40 and Avner NIS 3.44. He cited improved prospects of export to Turkey.
Reuters contributed to this report.