Tel Aviv stocks reversed to losses on uncertainty about early elections

Tel Aviv stocks ended the dull Tuesday session with a negative bias, after slim morning gains boosted by the resilient shekel.

But growing anticipation of early elections, on growing expectations that the government will fail to push through its tight budget for 2003, soured the mood. Falling share prices in Europe were no help, costing Israeli stocks slim opening gains that peaked at about 0.6%.

The collapse of the government and snap elections would not shore up the shekel, traders point out. A weak shekel would work to the detriment of the TASE.

The Maof-25 and TA-100 indices both finished down 0.1%, while the Tel-Tech-15 index went down 0.4%.

Trading volumes were slim again, NIS 135 million, because of the summer holidays and the general uncertainty still pervading the market. Institutionals are not changing their positions these days.

Teva Pharmaceuticals (Nasdaq,TASE:TEVA) climbed 2.4% on turnover of NIS 48 million, after starting on just that arbitrage gap.

Housing & Construction edged down by 0.3% as speculation swirls around its intention toward the Feuchtwanger Industries group. Now it's apparently building a bid together with Motorola (NYSE:MOT), which doesn't want to take over Feuchtwanger on its lonesome - but apparently wouldn't mind being Housing's junior partner in a bid.

Makhteshim Agan Industries lost 0.7% on thin turnover even though after Gmul Sahar said it saw the agrochemicals company's strategy of reducing South American exposure, working well. MAI has taken a beating as Brazil, a key market, reels.

The banking index finished unchanged as Hapoalim sank 0.4% on thin turnover of NIS 4.7 million, Leumi rose half a percent on NIS 7 million turnover, and Discount dropped half a percent.

Bank Mizrahi is the talk of the floor for a change, after the Wertheim family received regulatory approval to increase its stake to 26%. It is buying 12.5% from the heirs of Abe Feinberg for NIS 330 million. The transaction undervalues the bank compared with its market price. The bank's shares ended the day on a gain of 0.5%.

It was a lousy day for IDB group holding companies: Discount Investments sank by 1.1%, IDB Holding Corporation dropped 0.6% and IDB Development Corporation lost 0.8%. Clal Industries did no better with an 0.8% slip.

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