Israeli Stocks Face Mixed Open Amid Global Market Uncertainty
Translated & summarized from Globes by baba
The Tel Aviv Stock Exchange is poised for a mixed opening, influenced by global market trends and specific company news. Yesterday, the local market closed down, led by the energy infrastructure sector, though defense and oil/gas sectors saw gains. Elbit Systems announced a significant $235 million contract, while Veridis was involved in a desalination facility deal. Global markets showed mixed results, with US tech stocks experiencing volatility and a downturn in US housing market confidence. The Bank of Israel is expected to hold interest rates steady.
The story in 5 lines · by baba
- Tel Aviv Stock Exchange expected to open mixed amid global market sentiment.
- Elbit Systems secured a $235 million contract for rockets and artillery systems.
- Veridis involved in a NIS 54 million deal for Ashkelon desalination facility rights.
- US housing market confidence hits lowest point since 2012.
- Bank of Israel likely to keep interest rates unchanged at 3.25%.
The Tel Aviv Stock Exchange is expected to open with mixed trading, influenced by negative sentiment in Asian markets. Despite a recovery in Wall Street's chip sector yesterday, major South Korean chip stocks Samsung and SK Hynix fell significantly, dragging down the South Korean exchange. Tokyo and Hong Kong also saw declines, while US futures showed mixed performance. Israeli dual-listed stocks are anticipated to return to Tel Aviv with a negative arbitrage gap of approximately 0.3%, with dual-listed chip stocks Nova, Tower, and Camtek expected to be notably down.
Yesterday, the local market closed negatively, with the TA-35 index down 0.5% and the TA-90 index down 0.3%. The energy infrastructure index led the decline, falling 2.8%, followed by the Clal-Tech index, the biomedical sector, and the technology sector. Conversely, the defense index rose 2.4%, and the oil and gas sector gained 1.5%. Individual stocks like Arik Industries surged over 9%, while Veridis saw interest following an agreement to sell 40% of the Ashkelon desalination facility's operating rights for about NIS 54 million.
Notable business reports included Elbit Systems securing a strategic contract worth $235 million to supply medium-range rockets and PULS artillery systems to a European client over three years. Third Eye also reported a positive development, receiving a NIS 5.2 million follow-on order for AI-based electro-optical defense systems.
Wall Street closed mixed yesterday, with the Nasdaq up 1.1% and the S&P 500 up 0.4%, while the Dow Jones saw a 0.1% dip. The SOXX chip ETF rose over 2%, breaking a nine-day losing streak. In the US housing market, builder confidence fell to its lowest level since 2012 due to rising mortgage rates and material costs.
Looking ahead, the Bank of Israel is expected to keep its interest rate unchanged at 3.25% tomorrow. Analysts anticipate the rate will remain stable in the short term due to low inflation, but future monetary policy will depend on political stability and the defense budget. In the US, Bank of America expects the Federal Reserve to raise interest rates in October, citing persistent inflation and economic strength.
Goldman Sachs recommends investors increase exposure to consumer discretionary stocks, anticipating lower energy prices and interest rates next year. They also suggest focusing on defensive, quality stocks if tech sector pressures continue.
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