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Most of Israel's biggest stocks closed lower Wednesday, with the benchmark TA-25 breaking a string of 10 straight rises on weakness in Israel Chemicals, Africa Israel and a couple of the banks.
The benchmark TA-25 index fell 0.6% to 859.31, the TA-100 fell 0.5% to 874.64 and the Tel-Tech 15 index of top technology issues added 0.4% to 366.17. During the 10-session streak, the TA-25 rose 5.5%. The most-active issue was Bank Hapoalim, which advanced 0.7% to NIS 21.51 shekels.
Total volume on the Tel Aviv Stock Exchange was $222 million, about two-thirds the daily average through September of $335m.
Israel Chemicals was down 2.22% to NIS 21.1. The "cancellation this morning of Uralkali's IPO, the Russian potash producer, could lead to some pressure on [Israel Chemicals] today," Excellence Nessuah said in a morning note. "Last week, [the company] rose on the back of what was perceived as a high valuation of Uralkali, and investors apparently derived similar valuation multiples" for Israel Chemicals.
Among the other banks, Leumi fell 0.9% to NIS 17.45, Mizrahi-Tefahot was little changed at NIS 28.41 and Discount eased 0.4% to NIS 8.44.
Teva Pharmaceutical rose 0.5% to NIS 152.2; Koor Industries, with interests in agrichemicals, telecommunications and defense contracting, added 3.6% to NIS 228.8; Africa Israel, which has real estate and other holdings, lost 2% to NIS 265.5.
Housing & Construction rose 1.2% to NIS 5.1. The company said it received a $252m. highway-construction contract in Nigeria.
Elbit Medical Imaging Ltd. fell 0.5% to 121.8. The company, with interests in real estate and medical scanners, said a company in which it holds a 30% stake received approval for a â‚¬ 1.5 billion plan to build a tourism project on the island of Obuda in the Danube River in Budapest. With the approval, the company can apply for a building permit and begin construction.
The Tel Aviv Real Estate 15 Index, whose components include Africa Israel, Housing & Construction and Elbit Medical, fell 1.08% to 609.73. This was the second day the index fell more than 1% after running up 9.1% in the prior nine sessions.
Within the Tel-Tech 15, Gilat Satellite Networks fell 0.6% to NIS 41.58. The company will supply Teleport-Services, a Russian satellite-services operator with a broadband satellite hub station and related terminals.
The dollar strengthened 0.3% to 4.269 shekels. Nonetheless, Morgan Stanley International analysts called the shekel undervalued, even as it has strengthened some 7.5% against the greenback this year. The shekel closed 2005 at 4.603 to the dollar.
"The shekel's fair value against the dollar is 3.90, which means that it remains undervalued by 9.5% against the dollar and about 27.5% against the trade-weighted currency basket," Morgan Stanley analysts wrote. They called the country's economic fundamentals "strong," and at the same time, called the prospect of an interest rate cut based on the stronger shekel "premature."
Israel's benchmark rate is 5.5%, vs. 5.25% in the US.
US stocks were lower after the minutes of the last Federal Reserve meeting on interest rates made clear that inflation remained a serious concern for central bank officials, dashing hopes among some investors for an early cut in interest rates. The Dow Jones Industrial Average was down 50.26 points, or 0.4%, at 11,843.32 in afternoon trading. The Nasdaq Composite Index was off 10.11, points, or 0.4%, at 2,305.32 and the S&P 500 Index gave up 5.04 points, or 0.4%, to 1,348.38.
Aluminum giant Alcoa, the first of the Dow components to report, said late Tuesday its third-quarter profits and sales rose less than expected, tripped by a steep drop in metals prices and rising costs.
European mining shares closed lower on Wednesday, feeling the spillover effects from concerns about aluminum giant Alcoa Inc.'s lower-than-expected earnings report in the United States.
London's FTSE 100 index closed fractionally higher at 6,073.50. In Paris, the French CAC-40 index slipped 0.1% to 5,313, the German DAX Xetra 30 index closed flat at 6,119 and the pan-European Dow Jones Stoxx 600 index inched 0.1% higher to 348.72.
Asian shares ended mixed, with Japan's Nikkei average slumping late session on profit-taking in steelmakers and Internet shares.
But investors piled into exporters Canon Inc. and Sony Corp after the yen sank to a multi-month low against the dollar.
The Nikkei 225 Average declined 0.5% to 16,400.6, while the broader Topix index fell 0.8% to 1,622.1.
The dollar turned higher against the euro, and pared losses against the Japanese yen after the FOMC minutes. The euro was down 0.2% at $1.2510. Against the Japanese yen, the greenback was flat at 119.73.
Crude-oil futures touched a low under $58 a barrel as traders weighed an agreement by key oil producers to cut production against a monthly report that offered a lower oil-demand forecast and showed that world production fell in September.
Crude oil for November delivery was down 42 cents at $58.10 a barrel on the New York Mercantile Exchange after reaching a low of $57.90. The contract climbed to a high of $59.20 earlier, in volatile trading.
Gold futures climbed but closed under $580 an ounce for a second session as traders weighed the precious metal's value as a defensive investment against a backdrop of weaker oil prices and threats of more nuclear tests from North Korea.
Gold for December delivery climbed by 30 cents to close at $576.50 an ounce on the New York Mercantile Exchange. The contract traded as high as $583.40 earlier, after losing $6.60 in the previous session.
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