Market Report / Stocks Retreat on Heavy Volume

Tel Aviv stocks lost ground on heavy turnover yesterday as investors reacted to negative sentiments on European and Asian markets, traders said. All the leading Tel Aviv indexes ended the session in the red on turnover that exceeded NIS 2.3 billion.

In world markets, oil rose as cold kept the northern hemisphere in its grip - it is just mid-winter, after all. Gold rose above $1,370 an ounce on Monday as the dollar depreciated against the euro, and stocks retreated, in part because of renewed fears sparked by euro-zone debt. Investors quake at the thought of Ireland's opposition prevailing in oncoming elections and giving bondholders a haircut. The European Central Bank threw Portugal a temporary lifeline on Monday by buying its bonds, but Lisbon remains under pressure to seek an international bailout. Also, earnings season is about to start and investors are worried about the upcoming reports.

European shares fell sharply yesterday, erasing some of last week's gains as worries about the debt crisis in Europe once again took center stage ahead of sovereign debt auctions this week. UK shares were relatively resilient with a loss of 0.6%, but German shares fell 1.3% and the French benchmark index dropped 1.5%. Helsinki shares did worse, losing nearly 2%.

Back here, the benchmark TA-25 index lost 0.8% to 1,322 points and the broader TA-100 index fell 0.9% to 1,226 points. All indexes were in the red yesterday, with the exception of the Tel-Bond 20 index.

Israeli technology and real estate stocks were hardest hit. Their benchmark indexes retreated more than 2% yesterday.

Yet again, oil and gas shares swanned in the spotlight. Ratio Oil Exploration fell 0.5% on the day's highest turnover of NIS 234 million. Even so, its market capitalization is still NIS 4 billion. Second on the liveliest list was Makhteshim-Agan Industries, which eased up 0.1% against the trend on turnover of NIS 165 million. The day before, Koor Industries, an IDB group company, closed the deal to sell the pesticides maker to ChemChina based on a company valuation of $2.4 billion. The deal is expected to close in the third or fourth quarter.

Delek Drilling shares lost 1.3% on heavy turnover of NIS 30 million.

Israel Corporation said its hydroelectric power generation business Inkia may sell bonds on WallStreet to finance further expansion, Bloomberg reported yesterday, quoting a company source as saying Inkia had taken small steps in that direction, no more. That said, underwriters, including Bank of America Merrill Lynch, have already been recruited. Investors didn't react, and Israel Corp. stock ended down 0.4% on turnover of NIS 52 million. Meanwhile, Le Figaro has reported that the French firm, Electricite de France, plans to buy a 20% stake in Inkiam, but Bloomberg has Electricite denying the report.

Shares of Natural Resources gained 1.8% on news that the company's audit committee and board of directors had approved insider transactions to buy three gold ore reserves and a lead-iron source in North America from a controlling shareholders, Roy Sebag.