TA-25 sets record in anticipation of rate cut

Shares jumped to record levels Monday, as analysts speculated that in light of the strong shekel and calm inflation, the Bank of Israel will cut its benchmark interest rate at the end of the month.

MarketWatch: In-depth global business coverage SHARES TEL AVIV Shares jumped to record levels Monday, as analysts speculated that in light of the strong shekel and calm inflation, the Bank of Israel will cut its benchmark interest rate at the end of the month. Investors are also parsing Fitch Ratings' upgrade of Israel's foreign-currency and local-currency outlook to positive from stable. The TA-25 rose 0.66 percent to 947.69, the TA-100 added 0.48% to 948.77, and the Tel-Tech 15 index of top technology stocks added 0.13% to 377.39. The TA-25 broke its previous record set Sunday, while the TA-100 reached it highest-ever level last Monday. The Tel-Tech topped out at 482.78 on January 20, 2004. For the year to date, the TA-25 is up a bit more than 15%. The most-active issue was Bank Hapoalim, up 1.1% to NIS 21.38. Bank Leumi was the second most active stock, up 2.3% to NIS 17.46. Volume on the TASE totaled $339 million, close to the daily average for 2006 through November of $348m. "The low reading [on consumer prices] together with the strength of the currency strongly support another" 0.25 percentage point rate cut, analysts at Leader & Co. wrote. That would bring the central bank's benchmark rate to 4.75%. The Bank of Israel is slated to make the rate call next Monday. The dollar strengthened to 4.193 to the greenback from 4.178 on Friday. But the shekel has beaten up the dollar this year, having finished 2005 at 4.603. Fitch affirmed Israel's foreign currency rating at "A-" and its local currency at "A." "The positive outlook reflects the Israeli economy's increased dynamism and resilience following the reforms of recent years, demonstrated by the limited economic impact of the war in Lebanon and the strong rebound now underway," Richard Fox, head of Middle East and Africa Sovereign Ratings at Fitch, said in a statement. He also said that "strong inward and outward investment reflect Israel's growing integration with the world economy," and that the country's public debt ratio has declined. Teva Pharmaceutical Industries tacked on 1.5% to NIS 135.2. Leader Co. analyst Yoav Burgan restarted coverage with a buy rating and a $39 target price. Teva said it had shipped bupropion hydrochloride extended-release 300-milligram tablets, the generic version of Biovail Corp.'s anti-depressant Wellbutrin, pursuant to an agreement with Impax Laboratories Inc. and Anchen Pharmaceuticals Inc. Wellbutrin is marketed by GlaxoSmithKline. Biovail has filed a patent suit against Impax and Anchen. Anchen has been granted a summary judgment of noninfringement with regard to its product, and Impax is seeking a similar ruling, Teva said. WALL STREET US stocks were mixed at midday, as investors took profits on recent gains, notably in technology shares. The Dow Jones Industrial Average was up 17 points, or 0.1%, at 12,463 while the S&P 500 fell 1 point to 1,426 and the Nasdaq Composite Index lost 9 points, or 0.4%, to 2,448. EUROPE European shares closed lower. The Dow Jones pan-European Stoxx 600 index slipped 0.1% to 365.79, the UK FTSE 100 index closed down 0.2% at 6,247.40, the German DAX Xetra 30 index increased 0.1% to 6,597.25, and the French CAC-40 index eased 0.2% to 5,530.32. ASIA Asian shares ended mostly higher. Tokyo's Nikkei 225 Index ended the session up 47.8 points, or 0.3%, at 16,962.11. The broader Topix index gained 7.92 points, or 0.5%, to 1,665.32. CURRENCY The dollar was at 118.14 yen compared to 118.12 late Friday. The euro changed hands at $1.3064, compared with $1.3082. COMMODITIES Crude oil was down 85 cents, or 1.3%, at $62.58 a barrel amid forecasts for warmer weather across the eastern US. Gold for February delivery was down $1.70 at $617.40 an ounce. MarketWatch: In-depth global business coverage