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The banks and IDB group of holding companies are taking a beating Sunday, and dragging the blue chip index down 2%.

The banks continue to recede after being downgraded last week by Standard and Poor's. More bad news is looming for the financial establishment, after Moody's said it would re-examine their status next month, as will rival rating agency Fitch, after its banks analyst returns from his holidays. HSBC however noted in a research update that Israel's creditworthiness is not in question: the key issue for its stability is whether the Knesset will pass its budget for 2003, the investment bank writes.

Thw Maof-25 index is down 1.9% to 354.4 points and the Tel Aviv-100 index is losing 1.6% to 346 points. Tech stocks are sinking by 2.5%, from the weight of dual-listed shares that lost ground on Wall Street on Friday. Turnover is very slim at NIS 48 million at mid-day.

Trade ends early today, at 14:45, due to the

Hol Hamoed


Stocks began half a point down and have steadily strode south as the session wears on. The banks aside, share prices are depressed by the drop on Wall Street late last week, and the escalation in hostilities at home. Last week brought an abrupt halt to the hiatus in terror attack and led to an Israeli incursion into the compound of PA chairman Yasser Arafat in Ramallah.

After being cut from A-minus to BBB+,

Bank Hapoalim (TASE:


) stock has been sinking. Today it's down another 1.9%.

Bank Leumi (TASE:


), which suffered the same fate, is also losing 1.9%

Israel Discount Bank (TASE:


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), which was lowered to double-'Bpi' from triple-'Bpi', is tumbling by 2.2%.

Discount Investment Corporation (TASE:


) is down 1.9% after announcing today that it has completed the deal to sell its holdings in Albar Mimunit Services to businessman Eli Elezra, for NIS 268.5 million.

The other IDB group stocks are also in the doghouse, with

IDB Holding Corporation (TASE:


) down 2.2% and its subsidiary

IDB Development Corporation (TASE:


) losing 2%.

Clal Industries and Investments (TASE:


) is 1.8% off.

Teva Pharmaceuticals (Nasdaq:TEVA) (TASE:


), which started on a positive arbitrage gap of 0.6%, is up 0.2% on the highest turnover of the day, NIS 7 million.