Market Report / Blue Chips Claw to Gains on Heavy Turnover

Tel Aviv stocks closed one percent higher after a late-afternoon rally that lifted blue chips above the flatline yesterday. Traders had no explanation for the sudden rebound, which began at 16:45. Until that point, share prices had been below water, weighed down by the negative bias on Wall Street the night before. Moreover, trading in New York began with a negative bias yesterday as well.

Yet the TA-25 index gained 1 percent to end at 1,188.2 points and the TA-100 index rose 0.6 percent to 1,142.6. Since September 9, the TA-25 index of blue chips has gained 14 percent.

The TelTech-15 index bucked the trend in every way - it had been above-ground but reversed in late trading to end 0.2 percent down. In the bond market, fixed-income Shahars ended flat and linked Galils pulled back, losing 0.2 percent. Total turnover was heavy at NIS 2 billion.

The only index that stayed in the red after the choppy day was the broad market: the MidCap-50 index dropped 0.8 percent and the Yeter-120 index of smallcaps eased down by 0.2 percent.

On Monday the world learned that Israel's consumer price index had dropped by 0.5 percent in September, which brought annual inflation to 2.3 percent. Players believe the central bank will leave its lending rates unchanged at 4 percent for November, which would leave the interest rate gap between the dollar and shekel at 0.75 percent.

Meanwhile, though, the high level of inflation in the third quarter - 2.5 percent - led a host of companies to issue earnings warnings, because their costs of financing rose sky-high. In fact more than 100 companies were affected, because they had borrowed heavily and their loans are linked to the CPI. One was Gaon Holdings: there was no activity whatsoever in its stock yesterday. Another was Strauss, the food company: on Monday it admitted to third-quarter woes because of its interest payments. Yesterday its share price rose 1 percent.

Orckit stood out among the dual-listed pack of stocks with a 16 percent leap on lively turnover of NIS 18 million. The night before it had risen 10 percent on Wall Street, fueled by rumors of a new contract. New business is critical to Orckit, which has exactly one, count'em one, customer - the Japanese company KDDI, which hasn't been buying much of late.

Also dual-listed is Teva, shares of which added a hefty 1.3 percent on turnover of NIS 92 million. This year the drugmaker's stock has gained 41 percent, lifting its market capitalization to an all-time high of $34.5 billion (according to Nasdaq, where it's also traded).

Israel Chemicals is also hovering at record heights. The company's shares gained another 1.8 percent yesterday on heavy turnover of NIS 160 million. From the year's start the company's shares have risen 59 percent.

Tiv Taam gained a steep 2.8 percent, by the way.

Shares of Bank Hapoalim clawed their way above the flatline to end 0.3 percent higher while Bank Leumi couldn't make it, and fell 0.6 percent.

The Real Estate-15 index also crawled to a late gain, ending 0.7 percent higher. Its component shares were mixed, though. Gazit Globe ended 1 percent down as investors digested the news that it's lease a private jet for its controlling shareholder Chaim Katzman. Executive jets don't come cheap. While on large-cap real estate companies, Africa Israel gained 3.8 percent.