The Market Report / TA-25 Index Dips Below 800 Points as Banks, Chemicals, Real Estate Retreat

For the first time in months, Tel Aviv stocks broke through the 800-point mark, on the downside. The Tuesday session began with losses that moderated after the opening, but gained momentum again in the afternoon. Last night the Nasdaq index retreated by 1 percent, creating negative pressure on dual listed stocks as Tel Aviv began.

The banks weighed heavily on the local indexes, but chemicals and real estate also started to retreat, and were followed by a long list of stocks. Ultimately the TA-25 index lost 1.3 percent to 798.3 points, and the TA-100 index fell 1.3 percent to 822.8 points. The TelTech-15 index dropped 0.9 percent. Total turnover finished at NIS 1.1 billion, which supports the theory postulated by Migdal Capital Markets dealer Rami Dror. This was not a panic, just some profit taking. Nir Peleg of Excellence-Nessuah agrees, adding that the Tel Aviv Stock Exchange is in waiting mode ahead of the elections.

Wall Street for its part is waiting for a speech from Ben Bernanke, the new Fed chairman. Specifically it's waiting for hints about the future. Bernanke is widely expected to raise U.S. interest rates in March, for the 15th time in a row, to 4.75 percent. Some believe that later he'll make 16th rate hike to 5 percent.

This goes to explain the retreat in the bond market, where long-term Shahars dropped about 0.2 percent and long-term Galils retreated by as much as 0.3 percent. In the forex market the shekel weakened against the greenback by 0.3 percent to NIS 4.718 per dollar and weakened 0.4 percent against the euro, settling at NIS 5.6128 per euro.

The bank stocks were in full retreat: Hapoalim lost 2.9 percent on a volume of NIS 64 million, and Bank Leumi dropped 2.5 percent on turnover of NIS 62 million. Israel Discount Bank sank 1.6 percent and United Mizrahi Bank lost 2.5 percent. The banks index dropped 2.5 percent.

Looking at the dual-listed pack, Teva Pharmaceuticals (TASE, Nasdaq: TEVA) lost 0.3 percent on turnover of NIS 74 million. Nice Systems (Nasdaq, TASE: NICE) dropped 2.2 percent and Elbit Systems lost 1 percent. Some investors felt that Elbit Systems' pre-announced fourth-quarter results had been disappointing, given charges of $20-25 million that it faces on acquisitions and sundry. But the company also reported yesterday a $32 million deal with Portugal.

Partner Communications also succumbed to the negative trend; it spent most of the day above water ended down 1.4 percent. Perrigo was the only one of the six dual listed stocks on the TA-25 index to stay in the green: it rose 1.6 percent.

Gilat Satellite gained 1.1 percent, going against the tide. In two days it's risen by 4 percent, after reporting Monday that profitability has been restored for the first time in five years.

Lipman Electronic Engineering (TASE, Nasdaq: LPMA) lost 2.6 percent despite Monday reporting a $3 million follow-on project from its Mexican customer, a bank.

In the chemicals sector, Israel Chemicals (TASE: CHIM) lost 2.2 percent on heavy turnover of NIS 59 million and Makhteshim Agan sank 1.8 percent on turnover of NIS 86 million. Investors didn't seem persuaded by Deutsche Bank's recommendation to buy the stock and 12-month price target of NIS 22.

Real estate was not spared the woe: the Tel Aviv Real Estate-15 index dropped 2.2 percent. Delek Real Estate lost 4.2 percent and Gazit Globe dropped 2.4 percent. Alony Hetz retreated by a lesser 1.3 percent.