Capital gains tax jitters depress Tel Aviv stocks 1% Tuesday

Market traded flat during day but headed south just before closing. Partner rose 3.3% on rumors Hutchison may increase stake
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Tel Aviv stocks closed down 1% Tuesday after trading around the flatline most of the session.

The losses widened in late afternoon after Finance Ministry Director General Ohad Marani hinted on Israel Radio that the ministry may impose a capital gains tax as part of the emergency economic plan.

The Maof-25 blue chip index closed off 1% to 397.7 points, the TA-100 index closed down 0.8%, and technology shares slipped 0.4%. Total turnover was a low NIS 153 million.

The negative mood is also attributed to Bank of Israel Governor David Klein's surprise announcement yesterday that May interest rates will be raised by 0.2%. Nasdaq dropping 2.1%, and Dow Jones losing 1.2% on Monday didn't help either.

Cellular provider Partner Communications (Nasdaq, TASE:PTNR, LSE:PCCD) climbed 3.3% attracting big turnover. Partner opened on 3% negative arbitrage spread but was boosted by rumors Hong Kong telecoms giant Hutchison-Whampoa could increase its stake.

Teva Phamaceuticals (Nasdaq:TEVA) closed down 2% on the session's biggest turnover, NIS 19.5 million, closing the entire arbitrage spread it opened on Nasdaq on Monday.

Supermarket chain Super-Sol (NYSE:SAE) closed off 0.7%. Mizrahi Bank yesterday rated it a Buy, setting a price target 20% above the market. Energy holding group Delek closed up 0.5% after announcing it is in talks to acquire 85 filling and convenience store stations in the United States.

Food giant Osem closed off 0.4%, in addition to yesterday's drops. Yesterday, Union Bank of Israel rated Osem a Hold, setting a price target at market price.

Fox, which makes casual wear for the young crowd, today had its Tel Aviv debut, fully subscribed. Fox raised NIS 48 million at NIS 220 company value.

Discount Investments closed off 3%. Cable TV subsidiary Tevel on Monday petitioned Tel Aviv District Court for a stay of liquidation proceedings to protect it from its creditors.

Other IDB groups stocks: IDB Holding Corporation dropped 1.2%, IDB Development Corporation closed down 2.3%.

Bank Hapoalim closed down 0.6%, and Bank Leumi dropped 1.3%.