Stocks shot up Tuesday after a pro-Israel speech by U.S. president George Bush, coupled with the 2% rate hike by the Bank of Israel on Monday.
The session opened with gains across the board that picked up momentum as trade wore on.
While Bush's speech irritated the Palestinians over here and Democrats at home, dividing Arab nations in their responses and leaving Syria thunderously silent, Israeli investors were evidently delighted.
Also, the rate hike, at the upper end of expectations, seemed to indicate that Israel's economic leadership was taking matters into hand. Normally the stock market would be dismayed at a 4.5% interest rate climb in a month. But the times are not normal, and any sign of certainty is welcome in a market wracked by flagging confidence in its economic leaders, said market sources.
DBM Investment House manager Rami Dror noted that several factors supported share gains, led by Bush's speech, even though it has no immediate economic ramifications.
The Maof-25 index ended up 3.9% at 363 points and the Tel Aviv-100 index rose 3.3% to 351.5 points. Tech stocks gained a milder 1.5%. Turnover was a slim NIS 245 million.
The banks corrected from steep losses of late: Hapoalim soared by 4.4%, and Bank Leumi rose 5%. Yesterday the bank stocks received an Outperform rating from Investec analyst Kobby Finkelstein, based on the punishing the bank stocks have been taking.
Team's losses eased from its morning slide of 8%: it finished down 5.8%, on top of its 3.8% loss yesterday, because of an 18% slide by affiliate (39%) TTI on Nasdaq. Salomon Smith Barney yesterday downgraded TTI from Buy to Neutral.
Teva Pharmaceuticals (Nasdaq:TEVA) finished up 0.6% and Formula Systems (Nasdaq:FORTY) gained 3.7%. Elbit Medical Imaging gained 5% on new contracts by a subsidiary.