Market Report / Bank Stocks Drag Down Tel Aviv Benchmark

Valentine's Day notwithstanding, there was little love for equities in Tel Aviv or European markets on Tuesday. Israeli shares finished a choppy day of trading with a negative bias, aping European markets, which fell across the board after Moody's warned it might downgrade Britain, France and Austria.

While about it Moody's downgraded six other European nations, including Italy, Spain and Portugal, citing growing risks from Europe's debt crisis.

Total turnover in Tel Aviv was a wee NIS 890 million, a turnover not even respectable for Sunday sessions when foreign investors are quiescent. Perhaps investors were distracted by the thought of paying for chocolates and roses, but more likely they were staying put on the fence as Greek rioters set fires in Athens and the world economy growled.

Gold for instance pulled back on world markets because the dollar strengthened versus the euro, which was of course brought low by the spike of fear that Europe is spiraling down. Generally speaking, gold has slipped in February after rising 11% in January.

The benchmark Tel Aviv-25 Index lost 0.6% to 1,113 points and the broader Tel Aviv-100 Index lost 0.4% to 1,014 points. The dog of the day was the Banks-5 index, which fell 1.6%. Though movements of a single day cannot be parsed, there is some logic: If the state of the global economy worsens, however strict its budgetary discipline, Israel cannot escape the pain, and if Israel feels the pain, its banks' results will droop.

Among the day's prominent gainers was Magic Software, which gained more than 8% after publishing a strong report for the fourth quarter of 2011 (see Page 8 ).

Africa Israel Investments also stood out with a 6.8% leap north after a warm recommendation from Deutsche Bank (Page 8 ).

Shares of triple-play provider HOT gained 3.5% on news that the company is becoming an Internet service provider.

Investors seemed mixed about Nochi Dankner's plans to flatten the structure of the IDB group pyramid by merging Koor Industries into Discount Investment Corporation. Shares of IDB Holding Corporation, the company at the top of the pyramid, lost 1.5%, but Koor gained 5.8% and Discount Investment lost 0.9%.

Shares of the dual-listed stock Liveperson had a turbulent session, a day after filing its 2011 report, but managed to claw back from a late-afternoon trough to end with gains of 2%. Fourth-quarter revenue rose 22% to $36.5 million, Liveperson said. (With reporting by Reuters)