Market Report / Tel Aviv Stocks Rebound as World Markets Deliver Mixed Message

The rally in Israeli equities was led by banks and mid-cap stocks, and certainly owed nothing to direction from world markets, where the picture was mixed.

Tel Aviv stocks clawed back some ground yesterday, providing a breather in the nearly incessant retreat since the upheaval in Egypt began. The rally in Israeli equities was led by banks and mid-cap stocks, and certainly owed nothing to direction from world markets, where the picture was mixed.

Investors showed a taste for safe haven and hared for gold and the dollar; the yellow metal rebounded from its 1% loss last week to trade at about $1,422.65 an ounce, up from $1,417.70 late on Friday. "Safe-haven buying clearly seems to be pushing bullion higher, and may be the case until Japan and the world quantify the financial losses due to this disaster," Pradeep Unni, an analyst at Richcomm Global Services, told Reuters.

European markets retreated one and all as Japan grappled with the aftermath of the deadly earthquake and tsunami last Friday and the problems at its damaged nuclear facilities. Not a single major benchmark gained ground, though the losses were not dramatic. Worst hit were investors in Germany, where the benchmark DAX fell 1.7%, and Paris, where equities sank 1.2%. Over in Asia, however, the picture was stark: Japanese stocks fell and every other index gained ground.

Japan's benchmark TOPIX tumbled 7.5% on record volume, losing $287 billion in value, as estimates of the quake damage and nuclear crisis grew more grim. Investors fled large-cap companies that are expected to suffer as the rolling blackouts share the pain of the electricity shortfall following the temblor.

Although the yen appreciated in the immediate aftermath, yesterday it shriveled against the dollar. Yet other Asian exchanges gained ground, rising from 1% in Hong Kong to 1.3% in India to 0.8% in Seoul. Chinese shares ended a hair over the flatline.

Back in Tel Aviv, the benchmark TA-25 index finished 0.8% higher at 1,254 points and the broader TA-100 index gained 0.6% to 1,147 points. The Mid-Cap 50 gained 0.7%. Among the losers yesterday were technology and real estate stocks. NetVision soared 8.5% after its big sister in the IDB group, Cellcom, announced the official commencement of negotiations to merge. Cellcom gained 2% and IDB Holding lost 0.4%.

Shares of Ampal-American wilted 5.6% and its bonds sank after the company admitted that the supply of gas has in fact not resumed as the company had said it would on Sunday night, because a leak has been found in the system. Ampal owns 12.5% of EMG, the Egyptian company that supplies gas to Israel. The pipeline was sabotaged on February 5, since when no gas has arrived (see the top story). The company had said on Sunday night that the pipeline was fixed.

Investors seemed unmoved by rumbles at El Al (see page 8 ); its stock jumped more than 4% on turnover of NIS 2.2 million.

Another strong gainer among mid-caps was bioinformatics company Evogene, up 3.7%.

Delek Automotive lost 2.4% after the company delivered a disappointing report for the fourth quarter of 2010. The firm, controlled by CEO Gil Agmon and Delek Group, reported a net profit of NIS 41 million in the quarter, up just 1.4% year over year. Sales dropped 4% from a year earlier to NIS 1.25 billion, and the company's market share fell to 19% last year from 25% in 2009.

As said, the banks lifted the Tel Aviv indexes. Shares of Leumi gained 2.7% and Bank Hapoalim added 2.8%, both on heavy turnover.


With reporting by Reuters.