The Tel Aviv Stock Exchange is climbing sharply this morning as markets seem to be decoupling from the continued falls in Shanghai. The Tel Aviv 25 Index is currently up over 3% - similar to the gains on markets in Western Europe - after falling 7.5% over the past two days. The big banks, which have been among the stocks hardest hit, are rising strongly. Bank Hapoalim (TASE: POLI) is up 3.75% and Bank Leumi (TASE: LUMI) is up 3.86%. On the negative side, Opko Health Inc. (NYSE: OPK; TASE: OPK) continues to slide, and is about 5.5% off. Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) is up 3.14% and Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) is up 5.61%.
Faced with a collapsing stock market, the People's Bank of China is injecting $23.4 billion into the financial system through an auction of seven-day reverse-repurchase agreements, in a desperate attempt to boost the Chinese economy. This is the highest amount injected into the Chinese market since January 2004. "Bloomberg" reports that the Chinese central bank also sold 60 billion yuan ($10 billion) of three-month treasury deposits on behalf of the Ministry of Finance at 3%.
The Shanghai Stock Exchange is off a further 6% today, for the sharpest continuous fall since 2007, bringing the market to an eight-month low. On other markets, the trend is mixed following yesterday's plunge. Wall Street indices closed sharply off after a very volatile session, and futures contracts currently indicate a rise at today's opening in New York. A further $2.7 trillion were wiped off the value of stocks globally yesterday.
The Chinese government has not so far managed to dispel the concerns over the health of the world's second largest economy, or to convince the world that the reports on the economy are transparent and full. The decision last week to devalue the yuan cast doubt about the real state of the Chinese economy. Attempts to stabilize the stock market such as by forbidding short sales of some stocks and obliging state companies to buy stocks have not succeeded.
Published by Globes [online], Israel business news - www.globes-online.com - on August 25, 2015
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