Sun: Banks lead huge market losses

The day's biggest losers were Discount Investment and Delek Group.

The Tel Aviv Stock Exchange (TASE) fell today. The Tel Aviv 25 Index fell 6.99% to 1,074.27 points, the Tel Aviv 100 Index fell 7.20% to 972.80 points, and the BlueTech 50 Index fell 7.61% to 246.15 points. Turnover was NIS 2.66 billion.

Panic swept the TASE today in the wake of Friday's credit downgrade of the US to AA+. The market opening was delayed 45 minutes, after the Tel Aviv 25 Index fell over 6% in premarket trading, and the TASE website crashed altogether in late afternoon.

Investors are now waiting nervously for tomorrow's opening on Wall Street to get a sense of the downgrade's significance there and the market's direction. The TASE will be closed on Tuesday for the Tisha B'Av fast.

Tamir Fishman investments manager Gil Kuperberg said, "For the sentiment to change, the US administration must take command of the situation and launch a jobs program."

In the bond market, long-term Shahar unlinked government bonds fell by up to 0.2%, and long-term Galil CPI-linked bonds fell by up to 1%. The corporate bond benchmark Tel-Bond 20 Index fell 2.13%.

In the foreign currency market, options pointed to a 0.5% gain in the shekel-dollar exchange rate to NIS 3.537/$, and a 0.58% rise in the shekel-euro exchange rate to NIS 5.008/€.

In the stock market, all the shares on the Tel Aviv 25 Index and 99 of the shares on the Tel Aviv 100 fell today. The lone holdout was LivePerson Inc. (Nasdaq: LPSN); TASE: LPSN), which rose 2%.

On the Tel Aviv 25 Index, holding companies led the way down. IDB Holding Corp. Ltd. (TASE:IDBH) unit Discount Investment Corporation (TASE: DISI) fell 17.5%, Delek Group Ltd. (TASE: DLEKG) fell 9%, and Israel Corporation (TASE: ILCO) fell 8%. These companies' high leverage were contributing factors to the drops.

Another factor for Discount Investment was the announcement of its owners' loan to subsidiary Koor Industries Ltd. (TASE:KOR) because of its losses from its holding in Credit Suisse Group AG (NYSE: CS; SWX: CSGN; XETRA: CSGZ). Koor fell 17.6%. Koor subsidiary Makhteshim Agan Industries Ltd. (TASE: MAIN) fell 2.8%, after it shareholders approved its takeover by ChemChina.

Israel Corporation subsidiary Israel Chemicals Ltd. (TASE: ICL) fell 7.9%, despite announcing a $490 million potash contract with India.

Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) fell 4.7%, for one of the smallest losses among Tel Aviv 25 shares.

The Banking Index fell 8.7%, with Bank Hapoalim (TASE: POLI) down 9.3% on the day's largest turnover of NIS 181 million, and Bank Leumi (TASE: LUMI) down 8.4%.

In real estate, Africa-Israel Investments Ltd. (TASE:AFIL) fell 15.9%. IDB unit Property and Building Ltd. (TASE: PTBL) fell 11.6% after cancelling a property purchase in Chicago.

Modiin Energy LP (TASE:MDIN.L) fell 14.6% for one of the biggest losses among oil and gas exploration shares.

Published by Globes [online], Israel business news - - on August 7, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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