TASE Stocks Fall, Interest Rates Unchanged

The offices of the Tel Aviv Stock Exchange.   (FLASH90)
The offices of the Tel Aviv Stock Exchange. (FLASH90)

The Tel Aviv Stock Exchange continued to reel from turbulence in the Chinese economy and world markets on Monday.

The Tel Aviv 25 Index was down 4.4% at 1554.62 points after losing 4.08% the day before.

That was the worst day for the TA-100 index since September 2011, plummeting 4.1 percent while total turnovers reached NIS 1.4 billion ($360 million), with bio-med and small shares hit the hardest.

The shekel strengthened against the dollar and the euro in inter-bank trading on Monday, after the Bank of Israel announced that the interest rate for September would remain unchanged at 0.1%. The shekel-dollar exchange rate was down 1.3% to NIS 3.828/$, and the shekel-euro exchange rate is down 0.41% to NIS 4.44/€.

The shekel had been weakening amid analysts’ predictions that Bank of Israel head Karnit Flug would order a rate cut following publication of disappointing growth figures of just 0.3% in the second quarter of 2015. She didn’t, and the shekel had an uptick.

In giving the reasons for its decision, the Bank said: “The rate of increase in the CPI in recent months has been consistent with the inflation target. However, short-term inflation expectations declined sharply this month, against the background of decreases in energy and commodity prices in the past two months and the scheduled reduction in electricity prices; expectations are below the lower bound of the target range. Medium-term and long-term (forward) expectations remained entrenched near the midpoint of the inflation target range.”

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