Tel Aviv stocks are dropping 1.7% at Tuesday afternoon. The Maof-25 blue chip index is off 1.8% to 417.6 points and the TA-100 index is down 1.5% to 403.4 points. Technology shares are off 1.6%. Total turnover is slim at NIS 110 million.

The negative mood is attributed to negative economic data published on Monday. In Q4 gross domestic product shrank 7.2%, and unemployment worsened to 10.2%, up from 9.6% in Q3.

Negative backwinds from Europe and Nasdaq futures aren't helping either, and neither is continued fighting in the region.

Bezeq is at the center of attention, as it drops 4.7% on high turnover, NIS 18 million. The company issued a profit warning for 2001, and said results will show marked negative effect relating to substantial losses in subsidiary Pele-Phone, where Bezeq owns 50%. Cellular provider Pele-Phone is expected to make big one-time write-downs in Q4 on capital equipment. The results do not indicate deteriorated performance, Bezeq said.

IDB group stocks are once again down, following the cancellation of the Kardan-IDB deal for the control in IDB. IDB Holding Corporation is off 2%, IDB Development Corporation is off 1%, Discount Investments is dropping 3.2%, and Clal Industries is off 1.5%. IDB stocks have lost an aggregate 8% since the reports of the deal's collapse.

Ha'aretz reported that Polar Investments and Africa Israel are in talks to form a group for acquiring IDB, and that the Israel Corporation is also interested. It is estimated that regardless which group acquires the control, the deal will be based on a company value lower than $1.3 billion, the value for the Kardan-IDB deal.

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