Israeli stocks rose on Tuesday, led by Bank Leumi Le-Israel Ltd., and Bank Hapoalim Ltd., the country's two biggest banks, after Deutsche Bank AG said it had become "more positive" on the stocks.
The benchmark TA-25 Index advanced 10.09, or 1 percent, to 1,068.57. Investors bought and sold about NIS 1.5 billion of shares and convertibles.
Leumi, for which Deutsche Bank raised its recommendation to "buy," rose NIS 0.26, or 1.6%, to NIS 16.61. Hapoalim, for which the broker reiterated its "hold" recommendation, gained NIS 0.15, or 0.8%, to NIS 19.27.
Israeli bank shares have moved into "deep value territory" following a global sell-off of financial stocks, Deutsche Bank wrote in a report.
Elbit Systems Ltd., Israel's biggest non-government defense company, climbed NIS 2.50, or 1.4%, to NIS 187.30. Elbit will probably trade at NIS 55 in the next 12 months, up from a previous estimate of NIS 51, Clal Finance Batucha Investment Management Ltd. wrote in a note to investors.
First International Bank of Israel Ltd., the country's fifth-largest bank, rose NIS 0.70, or 1.4%, to NIS 50.15. The Tel-Aviv based bank agreed to buy 51% of Bank Massad Ltd. from Bank Hapoalim for NIS 236 million to add clients. The purchase follows its acquisitions of Ubank and Bank Otsar Hahayal in the past three years and will add 13 branches to First International's network of 152.
Israel Chemicals Ltd., which extracts minerals from the Dead Sea to make fertilizers and chemicals, gained NIS 0.60, or 1.9%, to NIS 32.90. The outlook for potash sales to China is "very firm," with further price increases likely before the end of the year, UBS AG wrote in a report Tuesday, saying the trend was "favorable" to Israel Chemicals.
Stocks advanced after profit at Lehman Brothers Holdings Inc. exceeded analysts' estimates.
Lehman, the biggest underwriter of US mortgage bonds, gained after fees from stock trading offset some losses from subprime mortgages. Adobe Systems Inc. climbed after the largest maker of design software said profit had more than doubled.
The Standard & Poor's 500 Index rose 9.85, or 0.7%, to 1,486.5 in morning trading in New York, ahead of the Federal Reserve's decision on interest rates. The Dow Jones Industrial Average added 88.12, or 0.7%, to 13,491.54, and the Nasdaq Composite Index jumped 12.17, or 0.5%, to 2,593.83.
Stocks rose on the strength of the Lehman Brothers report, easing concern the credit market debacle would sap profit growth.
HSBC Holdings Plc, Europe's largest bank by market value, and BNP Paribas SA led the gains. Northern Rock Plc, the mortgage lender bailed out by the Bank of England last week, jumped as much as 12% after the UK government said it would guarantee all the bank's customer deposits.
The Dow Jones Stoxx 600 Index added 1.5% to 367.67 as all 18 industry groups gained. The measure rebounded from two days of declines sparked by Northern Rock's announcement on September 14 that it sought emergency funds.
National benchmarks gained in all 18 western European markets. The UK's FTSE 100 increased 1.6% to 6,283.30, France's CAC 40 added 2% and Germany's DAX rose 1.3%. The Stoxx 50 rallied 1.5%, and the Euro Stoxx 50, a measure for the euro region, jumped 1.9%.
Stocks fell the most in a week, led by Mitsubishi UFJ Financial Group Inc., after Bank of America Corp. said fallout from US subprime-mortgage losses would hurt earnings.
The Morgan Stanley Capital International Asia-Pacific Index slid 1.5% to 149.41 as of 6:18 p.m. in Tokyo. Financial shares were the biggest drags among the measure's 10 industry groups, accounting for almost half the benchmark's retreat.
The Nikkei 225 Stock Average lost 2% to 15,801.80 in Japan, where markets were closed Monday for a holiday. Aiful Corp. led a slide by consumer lenders after Credia Co. filed for bankruptcy protection. Other benchmarks declined, except in India, Indonesia and Pakistan. Singapore was little changed.
The shekel decreased against the dollar to a Bank of Israel fixing of 4.1030.
The dollar was higher against the yen and steady against most other major currencies Tuesday, ahead of the US Federal Reserve's decision on interest rates. The dollar was up 0.6% against its Japanese counterpart to 115.71 yen. The euro was trading at $1.3869, compared to $1.3867 in late US trading Monday.
Crude oil surged above $81 a barrel for the first time ever in New York.
October futures rose 71 cents, or 0.9%, to $81.28 a barrel during late morning trading on the New York Mercantile Exchange.
Gold futures fell Tuesday morning, but held their ground above $720 an ounce as traders awaited the Federal Reserve's interest rate decision
Gold for December delivery was last down $2.40 at $721.40 an ounce on the Comex division of the NYMEX.