TASE cutting opening gains to 0.3%

Tel Aviv stocks are cutting 1.3% opening gains to 0.3% Monday mid-day. Yesterday, stocks cut earlier losses toward closing, ending the session down 2.2% after hitting 3% lows. Morning gains were attributed to the shekel rallying against the dollar to NIS 4.9, after the dollar hit NIS 4.96 in Sunday options trade.

In addition, Israel and the Palestinians have agreed on a 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.

The Maof-25 blue chip index is up 0.3% to 376.6 points, the TA-100 index is UP 0.4% to 364.2 points. Technology shares are rising by 1.2% after slipping 0.1% at opening. Total turnover remains a tiny NIS 80 million.

Market players noted bond markets calming, the weakening of the dollar and shekel instruments rallying. The players note that the agreement reached by Israel and the Palestinians helped leading indices cut losses toward closing on Sunday, and is boosting stocks today.

But the players noted the minuscule volumes of trade, which indicate that there are few buyers. The players said one should wait for developments in the bond market in coming hours, once Bank of Israel publishes bond tender results, and once mutual funds commence activity. The central bank will raise capital via a bond offering.

Bank stocks are making an upward correction effort after 2.5% drops yesterday attributed to the NIS 250 million embezzlement scandal at Trade Bank. Bank Hapoalim is up 0.8% on NIS 9.5 million turnover, and Bank Leumi is edging up 0.2%. The decision of Bank of Israel to raise the bank credit threshold is probably helping restore calm in the banking system.

Drug giant Teva Pharmaceuticals (Nasdaq:TEVA) is up 0.5% on similar positive arbitrage spread, attracting the session's biggest turnover, NIS 8.5 million. Teva is due to release its Q1 results after closing, and is expected to post 40% to 45% growth in net profit.

Cellular provider Partner Communications (Nasdaq, TASE:PTNR, LSE:PCCD) is up 1.5%. Investment Bank UBS Warburg expects Partner will post NIS 105 million losses in Q1. Digital-recording systems maker Nice Systems (Nasdaq:NICE) is rising 4.9% on NIS 5.7 million. 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 is up 0.8% on NIS 6.5 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 is up 1% on NIS 4.5 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.

Bezeq phone company is down 1.2% on NIS 3 million volume.

Insurance stocks continue the Sunday drops. Migdal Insurance is off 1.6%, Clal Insurance is down 0.8%. The two dropped on Sunday 3.6% and 5.4% respectively.