Stocks rose strongly to open the trading week yesterday on the Tel Aviv Stock Exchange. This will be a short trading week as the TASE will be closed on Wednesday and Thursday for Memorial Day and the Independence Day holiday. Shares opened the day with gains and spent the entire day in positive territory.
Turnover continued to be quite low and investors may seem to have been waiting once again for both local and international news. The bond market, and other investors, are certainly waiting for the announcement this evening by the Bank of Israel about May interest rates, which most analysts expect to remain unchanged at 2.5%. Investors are also waiting for more information on the major world economies and the fate of the never-ending European debt crisis.
The blue chip TA-25 index rose 0.8% to close at 1,161 points and the broader TA-100 index gained 0.4% to end the day at 1,067 points. The main indexes were all in the green for the day – except for the TA-Communications index, which lost 0.7%. The TA-Banks index climbed 1.5%, leading the TASE up, and the Real Estate-15 index gained 0.8%. The Biomed index jumped 4.7% and the Oil and Gas Exploration index rose 0.4%. The BlueTech-50 index climbed 3%.
Turnover was once again quite low, at just a bit under NIS 700 million. Large-cap corporate bonds rose 0.2% and the Three TelBond indexes, the -20, -40 and -60 are all now at record highs. Government bonds were mixed, but with little major movement for the day.
A number of dual-listed shares opened the day with large arbitrage gaps: Mellanox jumped 10.2% after releasing its financials. (See story on Page 8. ) Alvarion jumped 17% after it replaced its CEO last week.
Biomed shares were the big news with Protalix climbing 15.8%, Medigus gaining 9.6%, Hadasit Bio Holdings rising 12.2%, Prolor up 6.2% and Clal Biotechnology Industries gaining 7.5%.
Delek Real Estate climbed 13.2% on news it was near an agreement with bondholders. (See story on Page 8. ) Kardan NV rose 8%. The Delek Group gained 2.3%.
Only communications shares stood out on the down side: Bezeq lost 1.1%, Internet Gold fell 4.1%, and Cellcom lost 1%.
All eyes on Wall Street
While there is no official foreign exchange trading on Sundays and no representative rate is set by the Bank of Israel, shekel-dollar and shekel-euro options followed global trends, where the euro rose strongly against the dollar. As a result, the dollar was down 0.3% in options trading to NIS 3.75 and the euro rose against the local currency by 0.5% to NIS 4.96.
Eyes continued to be on the U.S. economy. After a strong first quarter, Wall Street has gotten a case of the jitters. A spike in bond yields has brought Europe’s debt crisis back to the forefront. U.S. economic figures point to steady but uninspired growth, and stocks have backed off the sharp gains that recently pushed indexes to near four-year highs.
U.S. stocks rebounded a bit last week after strong earnings reports, and investors are waiting to see if more positive surprises are in store. Nearly 180 of the SP 500′ will report earnings next week, and heading into a seasonally weak period, the market will need strong reports to offset the perception that there’s no more room to rally.
Global finance chiefs pressed Europe over the weekend after meeting in Washington for the International Monetary Fund’s spring meetings. They urged European leaders to take advantage of newly increased financial buffers and make the lasting reforms needed to tackle its debt crisis, which is threatening the world recovery.
A day after advanced and emerging countries agreed to double the firepower of the IMF to help contain Europe’s debt crisis, the IMF’s governing panel said the 17-nation euro area must make more cuts to government debt burdens, push bold economic reforms and stabilize financial systems. Debt problems will resurface and growth will stumble unless these steps are taken, the head of the IMF’s governing panel, Singapore’s finance minister, Tharman Shanmugaratnam, warned.
An uneasy calm returned to world financial markets after the Greek crisis subsided but the IMF is concerned that without strong action fresh tensions will erupt, sapping growth.
Reuters contributed to this report.