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Israel Shares Drop Most in Week on US Growth Concern, Protests

Sunday, 04 Sep 2011 06:56 AM

 

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Israeli shares slumped the most in a week amid concern the U.S. economy may slip into a recession and after more than 400,000 people demonstrated against the high cost of living in the Middle East nation.

Perrigo Co., the maker of over-the-counter drugs, slid the most in almost three weeks. Discount Investment Corp., billionaire Nochi Dankner’s holding company, retreated 4.4 percent. The TA-25 Index dropped 2.4 percent to 1,104.61 at 11:29 a.m. in Tel Aviv, the biggest intraday decline since Aug. 25. In the U.S., the Standard & Poor’s 500 Index tumbled 2.5 percent on Sept. 2.

Israelis took to the streets Saturday to protest against rising housing and other living costs, the daily Haaretz reported. Prices of homes have increased about 40 percent in the last three years, in part because of the nation’s “very slow” planning and construction process, Bank of Israel Governor Stanley Fischer said on Aug. 1.

The declines in Israeli stocks are being triggered “80 percent from overseas and 20 percent from the protests,” said Saar Golan, a trader at Clal Finance Batucha Brokerage Ltd. in Tel Aviv. “The concern is that the protests will lead to a stricter regulatory environment for companies and higher taxes.”

U.S. stocks dropped last week as the S&P 500 posted its biggest monthly decline in more than a year and a report showing employment stagnated in August fueled concern the world’s largest economy may slip into a recession. Payrolls were unchanged, the weakest reading since September 2010, the Labor Department said Sept. 2.

Perrigo retreated 4 percent, the most since Aug. 16, to 324.50 shekels. Discount Investment declined to 31.62 shekels, the lowest level since Aug. 29.

Israeli government bonds rose, sending the yield on the benchmark 5 percent Mimshal Shiklit down 12 basis points, or 0.12 percentage point, to 4.34 percent in Tel Aviv.

In the Persian Gulf, Dubai’s DFM General Index slipped 0.3 percent and Abu Dhabi’s gauge decreased 0.1 percent. Saudi Arabia’s Tadawul All Share Index rose 0.1 percent, while Kuwait’s measure rose 0.6 percent. Qatar’s QE Index jumped 1.2 percent and Bahrain’s BB All Share Index was unchanged.


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