The Tel Aviv Stock Exchange, after opening with negative bias on terror attacks yesterday in two West Bank settlements and Wall Street's slide, fell further as the shekel dove close to the NIS 5 mark against the dollar. The Maof-25 blue chip index ended down 1.4% to 381.6 points, and the TA-100 closed down 1% to 373 points. Technology shares lost 0.8%. The volume of trade was a relatively low NIS 218 million.

Players commented that the second consecutive day of dramatic shekel devaluation apparently directed attention to the foreign currency market, decreasing interest in the stock market.

Players noted the market was "alarmed by the dollar". They say the shekel fall stems from investors' lost confidence in the Finance Minister Silvan Shalom's economic leadership, and also Bank of Israel governor David Klein has lost his deterrent capability and is not a strong enough factor in the market right now. The players note that the governor's slower than expected interest rate hikes were insufficient to convince the market he is determined to stop the shekel freefall.

Nonetheless, they note that there is no sharp upturn in public involvement in the market via mutual funds and there is no unusual activity in dollar-linked bonds.

Bezeq, which opened up strongly, closed down 1.3% on NIS 22 million turnover after reporting its return to profitability yesterday. The state-run phone company posted Q1 2002 net profit of NIS 108 million, after a NIS 44 million loss in the preceding quarter.

Nonetheless, the company's top line eroded with revenue down 6% on the parallel to NIS 1.99 billion. Revenue was also lower than in Q4 2001, when the company posted NIS 2.08 billion income. One analyst said the market was unenthusiastic about the results and pointed out that in light of the uncertainty regarding the company's real estate, no one knows how to properly evaluate Bezeq's asset value.

Teva climbed 0.3% on the session's highest turnover ¿ NIS 53 million ¿ to close its arbitrage gap.

Mizrahi Bank gained 0.3% on NIS 10 million turnover. The share gained 2.8% yesterday on unusual turnover of NIS 32 million, as the lockup on employee shares ended. In total, 3% of capital shares or 6.3 million shares valued at NIS 70 million were released yesterday after the bank¿s 1998 offering. The fact that the share gained ground on a lockup end with exceptionally high turnover may indicate a big buyer snapping the goods off the floor.

The major banks slid with Bank Hapoalim slipping 0.7% and Bank Leumi retreating 2.3%.

The IDB group posted a sharp drop ahead of the group's financials tomorrow. IDB Hldings lost 1.9% and IDB Development shed 2.4%. Discount Investments lost 0.6% and Clal Industries (which published its quarterly report last week) dropped 1.7%.