The Tel Aviv Stock Exchange's benchmark indices pared the early losses yesterday to end only slightly lower, as news of the possible sale of Partner Communications by Ilan Ben-Dov to media magnate Haim Saban sent telecommunications shares higher.

Shares of the No. 2 mobile company ended the session up 7.4% on the news, pushing the Telecommunications Index up 3.7% to 504.62 points. A barebones report to the TASE by Scailex, Ben-Dov's holding company and Partner's parent, confirmed a report in the daily Calcalist that talks were underway with Saban. The Israeli-American media mogul may buy as much as 40% of Partner for as much as $450 million.

Scailex shares jumped 41%, and those of another Ben-Dov holding company, Suny, ended up 8.4% for the day. Bonds for the two companies also rose sharply, ending up 12% in heavy trading.

Even with yesterday's gains behind them, the bonds are still trading deep in junk territory, with yields of between 26% and 600%. That reflects deep concerns that Ben-Dov will not be able to make good on debt he owes bondholders, particularly by Suny, the company at the top of the Ben-Dov business pyramid. The prospect of an injection of Saban cash into Scailex now changes the outlook.

For the rest of the market, the day was generally more subdued. After falling as much as 1%, the blue-chip TA-25 index changed course, although not enough to finish the day up. The index ended at 1,125.62 points, a decline of 0.1%.

The TA-100 ended 0.2% lower, to 1,075.63. Turnover was a thin NIS 745 billion, apparently due to the absence of foreign investors yesterday.

The banking index made a more pronounced turnaround yesterday, reversing a decline of as much as 1.23%, to end up 0.6% up at 1,070.77 points. The Real Estate-15 index finished up 1.25% at 276.67.

After leading the TASE higher by about 10% in the space of a few weeks - in reaction to the expansionary policies adopted by the U.S. and European central banks - traders are now of two minds: either that it is time for a correction downward, or that shares will continue higher in an end-of-the-year rally.

Bank Leumi, in its weekly market report, said it expected the TASE to continue higher because it had not fully incorporated the gains in overseas share markets. Elections in the United States and Israel lower the security risk, it said. Over the longer term, Leumi said it sees more regulatory intervention, a deteriorating geopolitical environment and a slower global economy that is likely to cause shares to underperform.

Nochi Dankner's Discount Investment Corporation extended its gains by another 7.4% on the back of rising share prices for many of its biggest holdings, including Cellcom Israel, which advanced 6.1% yesterday, and Koor Industries, which ended 4% higher. But Super-Sol finished down 1.6% yesterday.

Elbit Medical jumped 10.9% and Clal Biotechnology Industries 7.4% after the joint venture company Gamida Cell said European regulators accepted its view that positive results from the Phase III trial of its StemEx cancer treatment constitute the basis for approval.

Elbit Systems advanced 0.7% after it reported that it won two contracts from an Asian country to supply defense systems at a total value of $50 million.

Ham-Let ended up 0.3% higher, to close at NIS 25.91, after the First Israel Mezzanine Investors fund, or FIMI, said its NIS 26-apiece tender offer for shares in the company that it doesn't already own had failed.