Market Report / Stocks Enjoy Mild Rebound

Stocks rose yesterday on the Tel Aviv Stock Exchange, after three consecutive days of losses.

Gains on Wall Street on Monday, combined with a positive trend in Asian markets, helped pull the TASE back into the green, as global investors were more optimistic about a solution to the looming U.S. fiscal cliff and recovering economic growth in China and Japan.

The blue-chip TA-25 index rose 0.4% to close at 1,216.39 points, and the broader TA-100 index gained 0.5% to end the day at 1,068.63 points. All the major indexes were well in the green for the entire day - except technology and biomed shares. The BlueTech-50 index fell 0.5% and the Biomed index dropped 1.2%.

The TA-Banks index climbed 1.5% and the Real Estate-15 index rose 1.2%. The TA-Insurance index stood out and jumped 3.2%. The Oil and Gas Exploration index rose 0.7%.

While the market may have risen, turnover was still low at NIS 962 million. Large-cap corporate bonds fell by up to 0.1%. Government bonds also fell slightly. Bank Hapoalim and the First International Bank, known locally as Beinleumi, both rose 2% for the day, and Bank Leumi gained 1%. Partner Communications stood out too - but not for the good - as the share plunged 5.3% after a class-action suit was filed on Monday against the firm over the planned sale of control from Ilan Ben-Dov to Haim Saban via Ben-Dov's Scailex. The plaintiffs claim the sale discriminated unfairly between various creditors of Scailex.

Mellanox continued to fall, and lost another 4.3% after dropping 6.3% already this week. Modiin Energy plunged 12.5% after reporting it lacked the funds needed for the Yam Hadera offshore test well.

Dollar falls 4.8% in a month

The dollar continued to weaken against the shekel yesterday, a day after the Finance Ministry upped its economic growth forecast for 2013 and 2014. The greenback lost 0.2% to a representative rate of NIS 3.769.

The euro was unchanged against the shekel yesterday and the representative rate remained NIS 4.969.

Since mid-November the dollar has dropped 4.8% against the shekel, falling from NIS 3.95. What could halt this decline is a drop in interest rates for January - a distinct possibility after the November consumer price index fell a surprising 0.5%. Lower interest rates would make investing in the shekel less attractive and boost the dollar in the short term, as yields on government bonds would fall and foreign investors might pull money out of the country.

In global forex markets, the euro hovered near a seven-and-a-half-month high against the dollar yesterday on signs of progress in U.S. budget talks and generally improving investor sentiment on euro zone assets. Market players sold the safe-haven dollar on optimism that U.S. policymakers can reach a deal to avoid the so-called "fiscal cliff," a mix of tax hikes and spending cuts that risks tipping the economy into recession.

Signs of compromise in the U.S. talks pushed world shares to their highest level since September. European shares rose close to 2012 highs yesterday, with the FTSEurofirst 300 index up 0.5%.

Reuters contributed to this report.