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Tel Aviv stocks lost 1.5% on first day after election of Ariel Sharon

Traders blame slip on Cisco fallout and the persisting uncertainty factor

Tel Aviv stocks ended down 1.4% in sluggish trade after the prime ministerial election victory - victory? knockout - by Ariel Sharon, and yesterday's nasty surprise from

Cisco Systems

(Nasdaq:CSCO).

The Maof-25 index was down 1.4% to 455.78 points and the TA-100 index lost 1.2% to 444.2 points. The Tel-Tech index was off only 0.73%. At NIS 169 million, total turnover could only be described as pathetic.

Traders had expected the uncertainty fogging over the Tel Aviv Stock Exchange to lift after the prime ministerial elections yesterday. Wrong.

Traders blame the Wednesday slump on fallout from Cisco, and events surrounding the special prime ministerial election yesterday.

Cisco first, that being the simpler issue. The company's results gave the Street a fairly nasty shock that spread throughout European exchanges and did not fail to hit Israel.

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Secondly, PM-elect Ariel Sharon was expected to win the election yesterday, but not by that much. In practice he won more than 60% of the popular vote. Moreover, the resignation of One Israel leader Ehud Barak after his trouncing at the polls has thrown the TASE into a tizzy.

The TASE had expected that Sharon would win the election and quickly establish a national-unity government with One Israel. Now he is seen more likely to build a narrow right-wing coalition, at least until One Israel has a chance to select a new leader.

So although traders had expected the end of the elections to dispel the uncertainty slowing down the TASE, Tamir Fishman investments manager David Levy says the murk is as thick as before.

Gili Cohen of Solomon Financial Markets said the markets were deathly dull as the majority of players wait for the election's consequences to arrive. They want to see what kind of government Sharon will assemble, who he will appoint as finance minister, and what his macroeconomic agenda will be.

He added that most of the action on the floor, such as it was, was by speculators on the Maof-25 index. Most major players, namely foreign investors and local institutionals, are glued to the fence. Cohen says it will be several more days before the fog clears from the political scene.

Dual-listed shares came down. Teva Pharmaceuticals (Nasdaq:TEVA) has sustained a 3.3% loss on the session's highest turnover of NIS 39 million. Koor Industries (Nasdaq:KOR) was off 0.6% and Blue Square Israel (NYSE:BSI) lost 0.9%.

On the other hand, Nice Systems (Nasdaq:NICE) rose 1.7% against the trend.

It's was a gray day for the banks. Bank Leumi, Goldman Sachs' favorite of the big Israeli banks, fell off 0.9%. Last week the Migdal insurance company purchased NIS 110 million worth of Leumi shares in off-floor transactions. Migdal now owns 8.5% of the bank's shares equity. The insurance company is positioning itself ahead for the final privatization of the bank. The state today holds 42% of Leumi's shares.