Tel Aviv stocks jump, TA-35 up 2.5% to 3% as the shekel firms

Shares on the Tel Aviv Stock Exchange rose sharply in Friday morning trading, with the benchmark TA-35 index climbing by roughly 3%, according to a news alert from Ynet, which described the move as a continuation of gains already under way in the market.

N12, the news arm of Israel's Channel 12, reported through its correspondent Yuval Sadeh that both the TA-35 and the broader TA-125 index were up 2.5%, that the banking index had jumped 3.3%, and that the Israeli shekel was strengthening against both the US dollar and the euro. N12 said the Tel Aviv rally was running counter to the direction of markets abroad.

What the indices measure

The Tel Aviv Stock Exchange, often called TASE, is Israel's only public stock exchange and the main venue for trading shares in Israeli companies at home. Its headline indices are named for the number of companies they track. The TA-35 follows the largest listed companies by market value and is the figure most often quoted as a shorthand for how the Israeli market is doing on a given day. The TA-125 is a wider gauge that adds a larger group of mid-sized firms, giving a fuller picture of the market as a whole.

The banking index groups together Israel's listed banks. Banks carry heavy weight in the Israeli market, so a strong move in that sector tends to pull the main indices along with it. The 3.3% rise N12 reported for bank shares was larger than the gain it reported for either of the two broad indices.

The shekel

The new Israeli shekel is the country's currency. A stronger shekel means each shekel buys more dollars or euros. For readers abroad, that matters in practical ways: it affects the value of money sent to or from Israel, the cost of buying property or living in the country for those considering aliyah (immigration to Israel under the Law of Return), and the returns foreign investors see on Israeli assets once converted back into their own currency. N12 reported that the shekel gained against both of the major currencies Israelis most often trade against, rather than against just one.

The political question raised by N12

N12's correspondent framed the rally with a question: whether investors were optimistic that a government would be formed. In Israel's parliamentary system, a government takes office only after a party leader assembles a coalition that commands a majority in the Knesset, the country's parliament. Until that happens, an outgoing or caretaker government stays in place with limited room to launch new policy, and the process of building a coalition can stretch over weeks of negotiation between parties.

N12 posed the link between the market move and coalition-building as a question, not as an established cause. Neither report cited a trader, an analyst, an official or a specific development in coalition talks to explain why shares were rising. Ynet's alert gave no explanation for the move at all.

Where the two reports differ

The two outlets gave different figures for the TA-35. Ynet put its rise at about 3%, while N12 put it at 2.5%. The alerts were published within seconds of each other, so the gap may reflect the index moving during the session or rounding by one outlet, but neither report says which, and Israel.com has not resolved the difference. N12 alone reported the TA-125, the banking index and the currency move. Ynet alone described the gains as continuing from earlier trading.

What the reports do not say

Neither report gives closing levels for any index, since both were published while trading was still in progress, so the final size of the day's gains is not known from this material. Neither identifies which individual companies drove the rise, gives an exchange rate for the shekel, or names the global markets that N12 said were moving the other way. The suggestion that hopes of a new government lifted shares was put as a question by one correspondent and was not supported in either report by a named source or a concrete development in coalition talks.