Israeli stocks fell Monday, led by Housing & Construction Holdings Ltd. after the country's biggest building company said it may report a third-quarter loss due to a rise in financial costs.
The TA-25 Index slid 8.21, or 0.7 percent, to close at 1,176.99. Investors traded about NIS 2 billion in shares and convertibles.
Housing & Construction declined NIS 0.20, or 2.2%, to NIS 8.85. Financial expenses may increase by about NIS 75 million due to a surge in inflation, Ramat Gan-based Housing & Construction said in a statement to the Tel Aviv Stock Exchange.
"The high inflation not only affects consumers, but adversely affects Israeli corporations who finance operations mainly through CPI-linked loans and bonds," Clal Finance Batucha Investment Management Ltd. said in a note to clients. "The main casualties of higher interest rates are highly leveraged companies like holding companies and real estate companies."
Citigroup Inc. downgraded Israeli shares to "underweight" from "overweight" on expectations of "modest" earnings growth, Andrew Howell, an analyst at Citigroup, wrote in an e-mailed report dated Friday.
Africa Israel Investments Ltd. increased NIS 2.80, or 0.7%, to NIS 386.50 Monday. Africa Israel Residence Ltd., a unit of Africa Israel, plans to build 900 units in five new projects in Jerusalem and to buy additional land for more construction.
Bank Hapoalim Ltd. fell NIS 0.24, or 1.2%, to NIS 20.68. Israel's second-largest bank by assets is concerned that profitability will decline from next year after it was forced to sell non-bank assets amid a decline in lending, Globes said, without saying where it got the information.
Managers at the bank, which completed a strategic review last week, are also worried about rising labor costs and a decline in the quality of Hapoalim's loan book, the financial daily reported.
Given Imaging Ltd., a manufacturer of ingestible cameras used to diagnose gastrointestinal diseases, climbed NIS 2.80, or 2.4%, to NIS 120.90.
Given Imaging's revenue growth is likely to get a boost from a US health plan that allows some cirrhosis patients to monitor their disease with the cameras, CIBC World Markets said in a report e-mailed Sunday after the market closed.
Ormat Industries Ltd. dropped NIS 1.70, or 3%, to NIS 55.05. Israel Brokerage & Investments Ltd. cut its recommendation for the maker and operator of geothermal power plants to "neutral" from "buy," according to an e-mailed report.
Stocks fell the most in a month after the largest US bank said credit losses will plague the financial industry for the rest of the year.
Citigroup Inc. posted its biggest drop in almost six weeks and led banks and brokerages to their fourth straight decline after CFO Gary Crittenden said late payments on home loans may worsen in the fourth quarter. Eaton Corp., the world's second-biggest maker of hydraulic equipment, retreated after lowering its full-year profit forecast.
The Standard & Poor's 500 Index lost 9.9, or 0.6%, to 1,551.9 during late morning trading in New York. The Dow Jones Industrial Average slipped 113.81, or 0.8%, to 13,979.27. The Nasdaq Composite Index fell 18.23, or 0.7%, to 2,787.45.
Citigroup retreated $1.19, or 2.5%, to $46.68 after third-quarter earnings fell 57% to $2.38b., or 47 cents a share. Citigroup's investment bank earned $446m. in the third quarter, a 74% drop from a year earlier.
Stocks dropped for the first time in five days after Royal Philips Electronics NV, the region's biggest consumer electronics maker, and Finnish papermaker UPM-Kymmene Oyj reported lower profits.
PSA Peugeot Citroen retreated after UBS AG recommended clients sell the French carmaker's stock.
The Dow Jones Stoxx 600 Index slipped 0.9% to 387.07. The measure has climbed 9.9% since reaching a five-month low on August 16.
Total SA and Royal Dutch Shell Plc led energy stocks higher, limiting declines, after Citigroup Inc. raised its earnings estimates for the region's oil companies and crude reached a record.
National benchmarks fell in 16 of the 18 Western European markets. France's CAC 40 slipped 0.6%, the UK's FTSE 100 index was down 86.2 points, or 1.28%, at 6,644.50, while Germany's DAX dropped 0.9%. The Stoxx 50 lost 0.9%, and the Euro Stoxx 50, a measure for the euro region, decreased 0.9%.
Stocks rose, led by energy companies, as crude oil prices climbed to a record. PetroChina Co. surged 13%, surpassing General Electric Co. to become the world's second-largest company by market value.
The Morgan Stanley Capital International Asia-Pacific Index added 0.6% to 168.75 in Tokyo. Benchmarks in China, Hong Kong and India climbed to records. Japan's Nikkei 225 Stock Average rose 0.2% to 17,358.15, while the broader Topix index lost 0.1%.
Malaysia and Indonesia were closed for the Id al-Fitr holiday. All other markets gained, except Australia. AGL Energy Ltd., the country's biggest electricity and gas retailer, had the steepest decline in the MSCI Asia-Pacific index after the company cut its full-year profit estimate.
Against the dollar, the shekel traded at 4.0300 by 6:13 p.m. in Tel Aviv, little changed from Sunday.
The dollar was mixed against the basket of currencies. The euro was buying $1.4230, up from $1.4176 late Friday, while the dollar rose to 117.78 yen, up from 117.58 yen late Friday.
Crude oil rose above $85 a barrel for the first time in New York on concern Turkish forces may pursue Kurdish militants in Iraq, curbing oil shipments as refiners prepare for the peak-demand heating season.
Crude oil for November delivery rose $1.11, or 1.3%, to $84.80 a barrel during morning trading on the New York Mercantile Exchange.
Gold rose to the highest since 1980 as a weakening dollar and record energy costs boosted the appeal of the precious metal as a hedge against inflation.
Gold futures for December delivery rose $9.10, or 1.2%, to $762.90 an ounce on the Comex division of the NYMEX. The metal earlier reached $765.40, the highest for a most-active contract since January 22, 1980, the day after the price reached a record $873.