After falling about 9% in the previous three trading days, the Tel Aviv Stock Exchange recovered handily yesterday and showed sharp gains.
The TA-25 index of blue-chip stocks rose 2.2% to close at 985 points, still well below the 1,000 point psychological barrier. The TA-100 rose 1.6% to close at 898 points. Yesterday, as it has done for more than a week, the stock exchange closed three hours early at 2:15 P.M. due to management fear of possible employee work sanctions.
Turnover was high, at NIS 2.5 billion for the day.
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The TASE switched direction yesterday as European markets rose, and in expectation of an aggressive 1% interest rate cut by the U.S. Federal Reserve Board. It will be interesting to see today how Tel Aviv, and global markets, respond to the lower than expected actual cut of 0.75%, which came well after the TASE closed.
Yesterday's trading was particularly volatile, and moved from small losses to over 2% gains. But the day ended on an optimistic note.
However, the good news was mostly for the big, well-known shares. The mid- and small-cap indexes were well in the red, as were technology stocks - especially those also listed in New York. The Mid-Cap-50 dropped 1.1%, the Mid-Cap-120 was down 1.7%. The TelTech-15 lost 1.6%.
The dollar continued its free fall yesterday - and the Bank of Israel did not intervene. The greenback was down 1.34% to a representative rate of NIS 3.38. This is only slightly above the level of last Thursday when the Bank of Israel decided to intervene and buy dollars.
Israel Chemicals shot up 6.8%, after dropping 9.4% the previous day. Since it is the most heavily wighted stock in the two big indexes, Israel Chemicals was responsible all by itself for 0.6% of the TA-25's 2.2% gain. The company received a number of positive recommendations from analysts yesterday - based on expected phosphate and potash price increases - including a Buy from Citi and an increase in the target price to 32% above yesterday's opening.
The Banks-5 rose 2.1%. Nevertheless, the index is still down 22% since the start of 2008. Investors chose to ignore the crisis in banking shares around the world. Bank Hapoalim rose 2.8%, though its market value is still only 82% of its equity - a sign that investors do not expect the bank to generate any respectable return soon. Bank Leumi rose 1.2% and is now trading at the value of its equity.
The Real Estate-15 closed up 0.8%, but is still down 22% since the beginning of the month. GTC jumped 7%.
Teva recovered from an almost year-long low, though part of the reason is the dollar. Teva gained 2.4% yesterday.
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