Tel Aviv finished Thursday up half a percent, torn between the influences of escalating violence at home and Wall Street's sharp gains on Wednesday.

The session started with 2.3% gains, boosted by speculators positioning themselves as options on the July Maof-25 index index expired today. But the gains eroded as the day wore on.

Local investors took cheer as the Dow Jones soared 6.3% on Wednesday and Nasdaq rose 5%, leading several Israeli dual-listed stocks to start the day with positive arbitrage gaps.

The final index for the Maof-25 options was set at 372.33 points. After the expiry, stocks sustained their gains.

The Maof-25, Tel Aviv-100 and Tel-Tech15 indices all ended 0.5% down. Total turnover was low for an options expiry day at NIS 451 million.

DBM Investment House manager Rami Dror cautioned against viewing the American stock market gains too positively. They indicate that the markets are highly nervous, he pointed out, and are behaving irrationally. There was no particular reason for the gains, Dror warned.

Tel Aviv stocks have been relatively resilient, compared with other exchanges around the world, but there is no consensus on why. Some attribute the strength to the shekel's gains, to the Finance Ministry's seriousness about budget cuts, and to the compromise reached on turnover tax. Pessimists say the strength will end any time.

Be that as it may, Teva Pharmaceuticals (Nasdaq:TEVA) was the liveliest share on the floor, as usual. It rose 2.1% on high turnover of NIS 56 million.

Israel Chemicals gained 2% after its arch-rival Great Lakes, an American company, reported improvement in its bromine sales.

Partner Communications (Nasdaq, TASE:PTNR, LSE:PCCD) rose 0.7% on turnover of NIS 19 million.

Tower Semiconductor (Nasdaq:TSEM) gained half a percent after announcing a rights issue, and investments by Israel Corporation which lost 2% - and the Ontario Teachers Pension Plan.