Bloomberg News

Israel Stocks Jump Most in 10 Months on U.S. Senate Tax Deal

January 01, 2013

Israeli stocks surged the most in almost 10 months after the U.S. Senate passed a bipartisan budget deal, agreeing to undo the potential economic harm of $600 billion in tax increases and spending cuts.

The benchmark TA-25 Index rose, with 24 of the 25 members advancing, pushing the index 2.5 percent higher, the most since Mar. 14, at the close in Tel Aviv. Bonds fell as investors’ risk appetite increased, sending the yield on the benchmark 10-year bond six basis points higher to 3.67 percent. The shekel advanced 0.1 percent to 3.7292 per dollar at 4:41 p.m. in Israel.

The Senate deal shifts the pressure to House Speaker John Boehner, who hasn’t said if he’ll accept the agreement. He will face difficulty mustering Republican votes for any bill with higher taxes for 2013 than they were in 2012.

“There was a lot uncertainty about whether there would be some kind of deal,” said Sharon Naveh, head of the international sales desk at Migdal Capital Markets Ltd. in Tel Aviv. “With this deal, the market is somewhat hopeful that the global economic situation might not deteriorate so sharply.”

The accord would make permanent the tax cuts for most households that expired at midnight, continue expanded unemployment benefits and delay automatic spending cuts for two months.

Bank Leumi Le-Israel (LUMI) led the TA-25 Index’s gains, adding 4.4 percent to 13.23 shekels, the highest since August 2011. Mellanox Technologies Ltd. was the gauge’s only decliner, slipping 0.4 percent to 223.9 shekels.

To contact the reporter on this story: David Wainer in Tel Aviv at dwainer3@bloomberg.net

To contact the editor responsible for this story: Alaa Shahine at asalha@bloomberg.net


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