Shekel rally boosted Tel Aviv stocks 1.5% Monday

Tel Aviv stocks ended the Monday session with 1.5% gains after three weak sessions.

The session opened with 1% gains on the strengthening of the shekel against the dollar. Investors were also encouraged by resolution of the crisis in Ramallah, where Palestinian leader Yasser Arafat has been under siege along with other Palestinians. In return for Israel lifting the siege, the PA will transfer several of the Palestinians involved in killing the late minister of tourism Rechavam Zeevi to detention under American and British supervision.

Reports on the agreement helped leading indices cut losses ahead of closing yesterday and boosted stocks today.

The Maof-25 blue chip index closed up 1.8% to 382 points, the TA-100 index closed up 1.3% to 367.4 points. Technology shares climbed 1.5%. Total turnover was a low NIS 182 million.

The session was jittery, leading indices at one point cut gains to 0.3%, picking up later against calming bond markets, and the strengthening of the shekel and shekel instruments.

The players also related the positive mood to the treasury's successful bond issue at prices similar to Sunday closing, and to the dollar trading at NIS 4.9, significantly lower than Sunday levels in options trade.

Drug giant Teva Pharmaceuticals (Nasdaq:TEVA) jumped 3.3% on positive arbitrage spread, attracting the session's biggest turnover, NIS 24 million. Teva beat Q1 estimates, posting 11% revenue growth to $545 million, and $86 million profit, 64 cents earning per share, against the forecast 55 cents EPS.

Bank stocks made an upward correction effort after 2.5% drops yesterday attributed to the NIS 250 million embezzlement scandal at Trade Bank. Bank Hapoalim closed up 2.2% on NIS 18 million turnover, and Bank Leumi closed with 0.6% gains. The decision of Bank of Israel to raise the bank credit threshold is probably helping restore calm in the banking system.

Cellular provider Partner Communications (Nasdaq, TASE:PTNR, LSE:PCCD) closed up 6.3% on NIS 3 million turnover. The company posted NIS 103.8 operating profit for Q1, double operating profit in Q4 last year. Revenue grew by 5% to NIS 929.5 million. Loss came to NIS 22.9 million, against NIS 34.2 million loss in Q4, and lower than the forecast NIS 60 million loss. Digital-recording systems maker Nice Systems (Nasdaq:NICE) closed up 5.6% on NIS 8 million volume. Nice announced it has won a new contract worth millions of dollars and is to provide NiceTrack systems to a Western law enforcement agency. Nice didn't disclose the country, but said this is one of its biggest contracts to date.

Israel Chemicals closed with 2.2% gains, on NIS 10 million volume. The company said it will distribute $26 million dividends to shareholders. The export-oriented firm is benefiting from the dollar strengthening against the shekel.

Another firm enjoying the shekel devaluation is agrochemicals firm Makhteshim Agan, which closed up 3% on NIS 10 million volume. The company announced Friday it has signed an agreement to acquire for $21 million the German firm Feinchemie Schwebda, which distributes generic agrochemical products. The latter's annual sales come to $40 million.

Insurance stocks rallied from earlier drops and posted sharp gains. Migdal Insurance climbed 2.2%, Clal Insurance closed up 2.7%. The two dropped on Sunday 3.6% and 5.4% respectively.