TA-25 advances on expectations for rate cut

The benchmark Tel Aviv-25 Index advanced 5.66, or 0.7 percent, to 863.83, marking its ninth straight daily gain.

October 10, 2006 10:41
3 minute read.


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TEL AVIV Israel's Tel Aviv-25 index rose in a holiday-shortened trading session. Bank Hapoalim Ltd., Israel's biggest lender, led banks higher amid expectations interest rates will fall as a strengthening shekel cools inflation. The benchmark Tel Aviv-25 Index advanced 5.66, or 0.7 percent, to 863.83, marking its ninth straight daily gain. Seventeen shares in the index rose and eight fell. Investors bought and sold about NIS 919.8 in shares and convertibles. Bank Hapoalim added 1.3%, to NIS 21.10 its highest since June 5. Bank Leumi Le-Israel Ltd., the country's second-biggest lender, advanced 2.2%, to NIS 17.56. First International Bank of Israel Ltd. added 2% to NIS 57.60. The shekel was fixed at 4.258 to the dollar Monday, after it reached its strongest level in five years on October 6, and was trading at 4.2602 in afternoon trade local time. The Bank of Israel said in minutes of its September rate-setting meeting released Monday that the Israeli currency will probably continue strengthening, helping to push inflation lower. The base lending rate is now 5.5%. Trading on the Tel Aviv Stock Exchange ends at 2:45 p.m. this week because of the Succot holiday. Bezeq Ltd., Israel's largest telecommunications company, dropped 0.9% to NIS 5.64. The union representing Bezeq employees declared a labor dispute over management's reorganization plans and said it will call a strike October 20, the company said. The union accused management of taking steps that will reduce Bezeq's market share in the fixed-line market and cut employee benefits and job security, Bezeq said. Bezeq is seeking to fire 2,000 people to cut costs. Nice Systems Ltd., a maker of digital-recording equipment, rose 1.9% to NIS 123.90. Ormat Industries Ltd., a maker and operator of geothermal power turbines, gained 1.9% to NIS 43.33. Ormat, the second-largest operator of geothermal power plants in the US, aims to expand capacity by up to 100 megawatts a year from 2008 as regulations spur utilities to use alternative power, Chief Executive Officer Yehudit Bronicki said an interview with Bloomberg Monday. Tower Semiconductor Ltd., a maker of computer chips for other companies, climbed 6.8% to NIS 8.11, bringing its gain in the past four sessions to 30%.


US stocks were little moved Monday by the impact of North Korea's decision to carry out a nuclear test. Investors focused on a $6 billion deal in the banking sector, broker downgrades for Mastercard and a report of a buyout offer for Cablevision's minority shareholders. The Dow Jones Industrial was down 0.02% to 11,848 in afternoon trade in New York as declines for Boeing Co, Verizon Communications and General Motors Corp. among others, kept the blue-chip index tethered to the downside. On the broader market for equities, decliners outpaced advancers by 17 to 11 on the New York Stock Exchange, and by 3 to 2 on the Nasdaq.


European stocks closed mixed on Monday as oil and metal producers got a boost from a rise in commodity prices on the back of news that North Korea made its first-ever nuclear test. Media companies were down after a broker warned that advertising growth could slow next year. The U.K. FTSE 100 index increased eased 0.49% at 6,030.90, led by a 14.9% rally in drug maker Shire after the company received tentative approval for its new hyperactivity drug.


Asian stocks dropped after North Korea said it carried out a nuclear weapons test. The Morgan Stanley Capital International Asia-Pacific excluding Japan Index slid 0.9% to 343.06 in evening trade in Hong Kong. South Korea's Kospi index slumped 2.4%, its biggest drop since June 13. The nuclear test prompted a sell-off in regional stock markets. Hong Kong's Hang Seng Index lost 1.3%, while Singapore's Straits Times Index dropped 1.1%. Markets in Japan and Taiwan were closed for holidays. China stocks climbed to the highest since 2001 in the first day of trading after a weeklong holiday.


Crude futures rallied Monday as traders waited for the Organization of the Petroleum Exporting Countries to confirm a production cut of one million barrels a day, with the news that North Korea has conducted a nuclear test further supporting prices. Crude for November delivery was traded up 1.9% at $60.90 a barrel in afternoon trade in New York, having traded as high as $61.09.


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