Tel Aviv stocks are surging 2% and more in early afternoon Monday, fueled mainly by the resumption of talks between Israelis and Palestinians.

Investors are also encouraged by the strengthening of the shekel and are ignoring the relatively hefty 0.6% gain by the consumer price index in July, indicating that inflation expectations for the coming 12 months remain low.

The Maof-25 index is rising 2.3% to 376.2 points while the Tel Aviv-100 index gains 1.8% to 362.6 points. TelTech-15 index stocks are rising by a narrower 1%. Total turnover is sadly thin, though, at NIS 87 million.

Despite the surge, the Tel Aviv Stock Exchange is still suffering from summer somnolence. Institutional investors are sorely missed and the trading volumes are pathetically low. Yesterday's was a tiny NIS 113 million, which lends the market to volatility.

Tamir Fishman & Co manager David Levy says the low volumes make trade highly technical in nature, more sensitive to support and resistance levels. After the publication of the July CPI data, Levy says, the relative resilience of the shekel and rising share prices on Wall Street should breathe some life back into the sluggish Tel Aviv Stock Exchange.

Onto the stocks! Bank Mizrahi today reported a 21% slide in second-quarter net profit to NIS 70 million. Its provision for doubtful debt were NIS 58 million, or 0.39% of its credit portfolio. Not bad, says Nessuah Zannex analyst Ronit Goodman: its bigger rivals, Hapoalim and Leumi, will have to set aside twice that up to 0.9% of their portfolios. Mizrahi stock is gaining 1.8%.

All the Maof-25 stocks are in the green, except for Teva Pharmaceuticals (Nasdaq:TEVA), which is down 0.6%, presumably on the influence of world markets.

Polgat 1, a member of the Clal Industries group, has been surging mightily on strong stock exchange data. Yesterday it rocketed up 23% on remarkable turnover of NIS 1.5 million. Today it's up another 3.6% on relatively lively action.

Among the Maof-25 notables, Blue Square Properties is adding 4.2%. Koor Industries (NYSE:KOR) is rising 2.9% on relatively hefty turnover, IDB Development Corporation is up 2% on the session's highest volume, and IDB Holding Corporation is rising 3.2%. The big banks, Hapoalim and Leumi, are both up by over 1.6%.