Israel stocks extend rally as traders weigh Iran; Saudi gains

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JERUSALEM, Nov 24 — Israel’s benchmark stock index advanced for a seventh day, tracking gains in US shares last week, as investors weighed lower borrowing costs and Iran’s nuclear accord with world powers. Saudi shares rose.

The TA-25 Index increased as much as 0.7 per cent to 1,354.53, the highest intraday level on record. The index, which closed at a record on Nov. 21, was at 1,351.93 at 2:34 p.m. in Tel Aviv. Teva Pharmaceutical Industries Ltd., the world’s largest generic drug maker, added 1.4 per cent, while Bank Leumi Le-Israel Ltd. climbed to the highest in more than two years. The Tadawul All Share Index advanced 0.6 per cent.

US stocks rose for a seventh week, sending the Dow Jones Industrial Average to the longest stretch of gains in almost three years, as improved data on employment and retail sales offset concern that economic stimulus will be cut. The Bank of Israel, which will decide monetary policy, has reduced the key interest rate to 1 per cent from 3.25 per cent since 2011 to spur the export-driven economy.

“The market is rising on momentum fueled by what’s happening in the world and low local interest rates,” Idan Azoulay, managing director at Tel Aviv-based Epsilon Investments, which manages the equivalent of about US$2 billion (RM6.43 billion), said by phone. “Iran is not a factor in trading today.”

‘Historic mistake’

Iran and world powers struck an accord today that broke a decade-long diplomatic stalemate, setting limits on the Islamic Republic’s nuclear program in exchange for relief from sanctions. Israeli Prime Minister Benjamin Netanyahu told the cabinet that the deal is a “historic mistake.”

“Everyone was expecting an agreement with Iran,” Steven Shein, a trader at Psagot Investment House Ltd. in Tel Aviv, said today by phone. “Further impact over the Iran deal will play out over coming weeks.”

Israel’s benchmark stock index has risen 14 per cent this year compared with a 21 per cent gain in the MSCI World Index and a 27 per cent advance in the S&P 500 Index. Teva rose 1.3 per cent to 144.6 shekels. Bank Leumi, the country’s second-largest lender by assets, increased 1.5 per cent to 14.14 shekels, the highest level since August 2011.

Twenty of 23 analysts surveyed by Bloomberg expect the Bank of Israel to hold the rate at 1 per cent. The yield on the government’s 4.25 per cent benchmark bond due 2023 fell five basis points, or 0.05 per centage point, to 3.57 per cent.

Saudi gains

Saudi Arabia’s benchmark climbed the most since Nov. 17 to 8,388.17 as Saudi Basic Industries Corp., the world’s second- biggest chemicals maker, rose 1.2 per cent. The Bloomberg GCC 200 Index of Gulf shares, Kuwait’s gauge and Qatar’s advanced 0.4 per cent. Egypt’s benchmark EGX 30 Index slipped 0.3 per cent to 6,436.13.

“The Iran deal is very good as it will benefit the GCC economies in the long term,” Tariq Qaqish, who oversees about 500 million dirhams (US$136 million) as head of asset management at Dubai-based Al Mal Capital PSC, said by phone today. “It will enhance the trade between the Gulf and Iran.”

The Strait of Hormuz, the waterway through which about 20 per cent of the world’s oil is shipped, separates Iran from six- member Gulf Cooperation Council countries, including Saudi Arabia. The agreement is the first to be reached since Iran’s atomic energy work came under international scrutiny in 2003. The country’s automotive and petrochemical industries will benefit from the eased sanctions.

The two sides now aim to conclude a comprehensive accord within six months. Western nations have accused Iran of harboring nuclear-weapons ambitions, a charge it denies. The US and Israel have said they are willing to use force if needed to prevent that from happening.

Dubai’s benchmark index, up 77 per cent this year, lost 0.5 per cent, while Abu Dhabi’s ADX General Index declined 0.3 per cent. Bahrain’s measure dropped 0.3 per cent and Oman’s MSM30 fell 0.1 per cent. -- Bloomberg

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