Market Report / Delek Inches Down Despite Strong Q2

Tel Aviv stocks ended Wednesday mixed with a negative bias despite intense worries at the opening, thanks to sharp drops on Wall Street the night before

Tel Aviv stocks ended yesterday mixed with a negative bias despite intense worries at the opening, thanks to sharp drops on Wall Street the night before.

Trade began with a 1 percent dip by blue chips, but the negative trend flattened out quickly as more and more upbeat financial statements poured in, and as European markets traded stably.

The start of trading in New York yesterday, where stocks were on the rise, also helped stabilize declines before the close of trading.

The TA-25 index dropped to 1,067 points, losing 0.4 percent, as did the TA-100, which fell to 1,044 points. The day before blue chips had lost about half a percent, ending a three-day rally.

Bonds ended mixed. Fixed-income Shahar bonds rose 0.1 percent to close at yields of 5.83 percent, while long-term linked Galils shed 0.2 percent. Total turnover beefed up to NIS 1.7 billion after several days of slim trading.

On Tuesday, Nasdaq tumbled 2.4 percent and the Dow Jones fell 2.1 percent, in response to mixed results in the U.S. housing sector.

The negative mood on the markets affected the financial sector in particular, which lost 3.5 percent after the Merrill Lynch investment house downgraded its recommendation for Bear Stearns, Citigroup and Lehman Brothers from "buy" to "neutral." On the local market, the Banks-5 index dropped slightly, by 0.5 percent. However, investors focusing on Bank Leumi's financials sent the company's stock up 0.6 percent. Leumi reported profits of NIS 913 million for the second quarter, up by a factor of 2.4 over the parallel quarter last year. Bank Hapoalim shares lost 1.5 percent.

The influx of financial reports pushed share prices up, including Migdal Insurance, which rose by 2.8 percent, and Harel, which rose by 1.3 percent after reporting net profits of NIS 255 million in the second quarter.

The Delek Group (energy and real estate) also reported improved results for the quarter, but its share price nonetheless edged down by 0.2 percent.

Housing and Construction Holding Co. lost 0.7 percent on turnover of about NIS 10 million, after reporting that its profits fell by 40 percent in the second quarter. The company delayed a planned flotation of Shikun Ovdim, after its controlling shareholder, Shari Arison, realized that teh subsidiary couldn't achieve the desired market cap of NIS 3 billion.

The real estate market is suffering from growing concerns over an extended credit crisis and rising interest rates, and pessimism left the real estate index down yesterday. In fact it's been underperforming the market for days. The index's two most important securities, Africa Israel and Gazit Globe, lost 0.5 percent and 1.8 percent, respectively.

Shares of Bio Light Israeli Life Sciences Investments soared by 33 percent on relatively heavy turnover of about NIS 7 million, after announcing that tests had proven the efficacy of its drug against weight gain for women under 50.