Ericsson, negative Nasdaq futures pushed TASE down 0.8% Monday

Tel Aviv stocks closed down 0.8% Monday, drops that weren't much affected by Bank of Israel Governor David Klein's unexpected announcement at 16:30 that interest rates for May will be raised by 0.2%.

Stocks traded with a negative bias most of the session. Most blue chip stocks traded on losses at mid-day, with drops increasing ahead of closing. At any rate, the 0.2% interest rate hike affected trade only in the last fifteen minutes of trade.

Ericsson today released its financial results for Q1, posting heavy losses. The results were worse than expected, and this negatively impacted the mood on TASE. In addition, the session saw short-term profit taking after several days of gains. Negative Nasdaq futures didn't help either. The Maof-25 blue chip index closed off 0.8% to 401.6 points, the TA-100 index closed down 0.7% to 386.4 points, and technology shares dropped 1%. Total turnover came to NIS 156 million, lower than in recent days.

Despite the drops, market sources estimate that the positive trend of late will continue in coming days, although stocks are likely to post more moderate gains. The estimate is based on relative security calm, and to the army's pullout from most Palestinian town centers. In addition, Prime Minister Ariel Sharon on Sunday announced the end of the Defensive Shield operation that began some three weeks ago, in the course of which army forces conducted anti-terror operations in Palestinian territory. Other factors contributing to the lifting of uncertainty: Yesterday, the Finance Ministry presented PM Sharon a NIS 13 billion emergency economic plan, involving budget cuts in many areas.

DBM CEO Rami Dror expects increased impact by foreign markets on TASE in coming days, after TASE was largely affected by developments at home. Options expire Thursday, and Dror estimates that speculators on the Maof-25 index will try moving the index toward expiry into the range of 400 points to 410 points.

IDB group stocks continued attracting attention. Ganden group is in advanced talks to acquire control in IDB Holding Corporation at a $1 billion value, 30% above the market price.

IDB Holding Corporation closed off 1.1%, IDB Development Corporation dropped 1.3%, Discount Investments closed off 2%, Clal Industries climbed 0.7%.

Electra Consumer Products dropped 0.4% after posting gains most of the session. Bank Hapoalim cut its price target to NIS 33 from NIS 52. The new price target is 25% above the market.

Food giant Osem dropped 3.1%. Union Bank of Israel rated Osem a Hold, setting a NIS 41.8 price target, 3.8% above the market.

Drug giant Teva Pharmaceuticals (Nasdaq:TEVA) closed down 0.7%.

Bank Hapoalim and Bank Leumi each slipped 0.1%.

Phone company Bezeq closed off 0.2%.