Tel Aviv stocks closed the Thursday session, truncated due to the Sukkoth holiday, mixed with a positive bias that was moderated by news of a looming credit downgrade for Israel by the British rating agency Fitch.
Israeli stocks inched up for the expiry of options on the Maof-25 index Thursday morning. The record index for the expiry was 349.91 points, up 0.15% from the closing index on Wednesday. Turnover at expiry was thin at NIS 140 million, a fraction of the usual volume.
The positive trend continued after the expiry, with the blue chip indices rising moderately in the morning but reversing to hover at a gain of 0.4%.
Israeli stocks started correcting upwards since Wednesday afternoon, when the market learned that Moody's has no intention for the time being of cutting Israel's A2 sovereign credit rating. The mood was also lifted by Wall Street gains and the shekel's rebound, which lowered the dollar from NIS 4.91 to NIS 4.833, a hefty 1.1% below its representative rate of yesterday.
The momentary booster of the Moody's restraint was tempered by Fitch's revelation that it will be updating its research on Israel in the coming weeks, and is highly likely - "more than 50%" - to cut Israel's sovereign credit rating.
The country isn't about to default on its debt, Fitch's Nick Eisinger told TheMarker, but its central bank and treasury do not cooperate, the ratio of debt to GDP has climbed to around 107% and isn't about to fall due to the recession, and there is always the effect of the hostilities on the economy. That refers to hostilities with the Palestinians: Eisinger has not begun to quantify the effect of tensions with Iraq.
The Maof-25 index of blue chips finally ended on a gain of 0.6% to 351.3 points, while the broader TA-100 index closed up 0.4% at 340.8 points. The Tel-Tech-15 index of the weightiest 15 hi-tech companies ended down 0.6%. Total turnover was low for an expiry day at NIS 272 million. During more active periods of the Tel Aviv Stock Exchange's history, the total volume changing hands on expiry days has been around a billion shekels.
Onto the stocks -
) moved along briskly, rising 0.3% on high turnover of NIS 44.6 million, after starting on a positive arbitrage gap of 1.9% with Nasdaq.
The banks ended in the green, with
Bank Hapoalim (TASE:
) up 0.8% on a volume of NIS 28 million, losing its top billing on the most-traded list to the drugmaker Teva.
Bank Leumi (TASE:
) rose 0.4% on a volume of NIS 17.7 million, despite being hit with an NIS 40 million class-action petition for allegedly improperly charging customers for print-outs made by clerks checking on accounts, without asking for the customer's permission.
Both banks are correcting from the beating they took after Standard and Poor's downgraded them last week from A-minus to BBB+, a move that intensified fears of a looming sovereign rating cut.