Negative trend in Tel Aviv led by construction stocks, Aura falls by about 5%
The TA-35 index is down by about 0.6%. A nightly exchange of blows between the US and Iran, along with increased expectations for an interest rate hike on Wall Street, are weighing on markets. Oil prices are climbing, complicating the Bank of Israel's upcoming interest rate decision.
Trading review: current reports, trends, indices, stock prices, bonds, foreign exchange, commodities, and analyst recommendations.
Tech Sector Under Pressure
Among the 125 largest stocks in Tel Aviv, dual-listed stocks are standing out negatively today, particularly chip stocks — Nova, Tower, and Camtek. Joining them is the stock of chip testing equipment manufacturer QualiTau, which continues to lose ground. It fell 3% on Friday following its report. The company's market value is 1.8 billion shekels. Since its peak last March, the stock has lost 55%, wiping out over 2.2 billion shekels from its value. Alongside the report, QualiTau announced a dividend of 3 million dollars (61 cents per share) and approved a share buyback program estimated at 35.7 million shekels.
Construction Sector and Market Indices
Against the backdrop of Middle East escalation, declines in Tel Aviv continue, with leading indices shedding about 0.6%. The construction index is down by about 2% ahead of tomorrow's interest rate decision. Aura stock is falling by over 5%, despite a recent surge following its quarterly report. The company, managed by Yaakov Atrakchi, recorded a 36.9% revenue growth in the second quarter to 560 million shekels. Gross profit totaled 122 million shekels (21.8% of revenue, compared to 26.2% in the corresponding quarter). Net profit attributable to shareholders fell by 23.8% to 48.4 million shekels.
Tel Aviv is ending the month with a mixed trend: the TA-35 rose by 0.5% while the TA-90 fell by 1%. Financial stocks have performed well this month, with insurance and banking indices surging 11% and 6% respectively. Conversely, the defense index fell by 15%, and the technology index lost over 6%. Renewable energy stocks also recorded a poor month, falling by almost 10%.
Geopolitics and Markets
The trading week began with an exchange of blows between the US and Iran. American forces attacked missile launchers in the Strait of Hormuz, and Iran responded with launches toward American ships and bases in Jordan. President Donald Trump posted a video showing the bombing of the Kharg Island oil terminal. In response to the rising tension, Brent crude oil prices have climbed by 2%, crossing the 90-dollar-per-barrel threshold.
Bank of Israel Decision
Economists agree that the upcoming interest rate decision is complex. Yoni Fanning of Mizrahi Tefahot notes that excluding the strengthening shekel, annual inflation is likely around 2%. Given the yield gap between Israeli and US government bonds and regional uncertainty, Fanning estimates the Bank of Israel will prefer to leave the interest rate unchanged. Modi Shafrir of Bank Hapoalim suggests the decision will depend heavily on the dollar-shekel exchange rate; if it trades above 3 shekels, the chance for a rate cut decreases.
SpaceX Forecast
Morgan Stanley marks SpaceX stock as a buying opportunity after it plummeted 30% from its mid-June peak. Analyst Adam Jonas notes that the company's plans for the "Starbase" launch complex, involving 100 billion dollars in investment, could provide a tailwind. The bank set an "overweight" recommendation with a target price of 300 dollars, representing an upside of about 110%.
