Israeli Stocks Fall, Bonds Gain on Europe Debt Crisis Concerns

May 9 (Bloomberg) -- Israeli stocks slid to the lowest level in three months on concern Greece’s debt crisis is spreading and as a U.S. jury ruled against a unit of Teva Pharmaceutical Industries Ltd.

Israel’s benchmark TA-25 index declined 1.1 percent to 1,128.14, the lowest since Feb. 8, in Tel Aviv. The measure earlier dropped as much as 3 percent. Teva, the world’s largest generic drugmaker, slumped the most in more than a month. Government bonds rose, with the yield on the benchmark Mimshal Shiklit note due February 2019 falling to a two-week low of 4.77 percent as the price increased 0.22 shekel to 109.85.

Stock losses “were expected following the collapse in the global markets,” said Yaron Fridman, equity strategist at Bank Hapoalim Ltd. in Tel Aviv. “There is no reason for long-term declines as they stem from the global retreats and not from real economic reasons, as the Israeli economy is strong and companies’ performances should continue to be strong.”

U.S. stocks fell the most in 14 months on May 7 with the Standard & Poor’s 500 Index erasing 2010 gains amid concern a 110 billion-euro ($140 billion) rescue package for Greece won’t be enough to keep Europe’s most indebted nations from defaulting. Moody’s Investors Service said May 6 that banks in Portugal, Spain, Italy, Ireland and the U.K. could be at risk as the threat of contagion grows.

Europe’s troubles shouldn’t affect Israel because of its “restrained” economic policies, Finance Minister Yuval Steinitz told Israel’s Army Radio today.

Propofol Ruling

Teva declined 2.6 percent, the most since March 19, to 221.50 shekels. A jury said Teva Parenteral Medicines must pay $356 million over its propofol medicine, which is used to sedate surgery patients.

The Tel-Bond 60 index, a gauge of the 60 largest corporate bonds, declined 0.6 percent. The shekel gained 0.2 percent to 3.7975 per dollar on May 7.