Tel Aviv stocks react mildly to Knesset nixing budget cuts - TheStreet

Tel Aviv stocks are barely reacting to the government failure to pass its economic plan through parliament on Monday. Blue chips are starting the Tuesday session with a mild drop of 0.7% on fairly high turnover, compared with the desultory activity characterizing the Tel Aviv Stock Exchange of late.

Market players warn that if the government fails to push its plan through Knesset on Wednesday, stocks are likely to react much more sharply.

In a dramatic move Monday night, Sharon sacked four of five ministers belonging to the ultra-orthodox Shas party, as well as the party's three deputy ministers, after their votes contributed earlier in the evening to the narrow defeat of the government's emergency economic plan in the Knesset. Today the prime minister reiterated his intention to keep the disloyal ministers out of government.

Teva Pharmaceuticals (Nasdaq:TEVA) is kicking off Tuesday with a 2.5% rise after UBS Warburg yesterday upgraded the generic drugs giant from Hold to Strong Buy. The investment bank also raised its price target for Teva from $60 to $81.

Teva also advised the stock exchange yesterday that it has received U.S. Food and Drug Administration approval to market Copaxone, its treatment for remitting relapsing multiple sclerosis, in pre-prepared syringes.

Bank Leumi is losing 0.8% on growing assessments that the government will not be selling a chunk of its 42% stake on the market this month.