Israel's benchmark stock index rose to a record with shares of Nice Systems Ltd., a maker of digital-recording equipment, leading the advance.
The TA-25 Index added 6.80, or 0.7 percent, to 1,035.61 as of the close in Tel Aviv, as 17 shares climbed and eight declined. Investors bought and sold about NIS 1.6 billion in shares and convertibles.
The stock exchange resumed trading after it was closed Sunday and Monday for the Pessah holiday.
Nice Systems advanced NIS 3.90, or 2.7%, to NIS 146.60. We see "growth opportunity related to the company's video security offerings as government and public agencies shift toward proactive security management given the growing threat of terrorism," Ari Bensinger, an analyst at Standard & Poor's said in a report published on BusinessWeek.com's Web site on April 9.
Aladdin Knowledge Systems Ltd. jumped NIS 4.76, or 6.2%, to NIS 81.76. The computer security company won a contract with Unisys Corp. to supply smart cards, Aladdin said Monday.
Partner Communications Ltd. rose NIS 1.80, or 2.8%, to NIS 66.59. The country's second-biggest mobile telephony provider has installed a program developed by Amdocs Ltd., the world's largest billing and customer service software company by sales, Amdocs said.
Retalix Ltd. added NIS 2.52 shekels, or 3.1%, to NIS 84.69. The maker of software used by grocery chains said it has installed its software in 185 stores belonging to 7-Eleven Norway and Sweden, a chain that is part of the Reitan Servicehandel group. It also reaffirmed its full-year outlook for 2007.
Israel's benchmark Shahar bond gained for the fifth day running as the announcement of a budget surplus stoked speculation the government will issue less debt and cut interest rates.
Israel posted a budget surplus of NIS 1.09b. in March, its third in as many months, as economic growth boosted tax receipts by almost 12 percent from a year earlier. Investors bet the central bank may now resume cutting borrowing costs, after keeping them on hold at 4% for April.
"The local data is very strong and is pulling the market up," Sagie Poznerson, head of trading at Leader & Co Ltd., said by telephone from Tel Aviv. "This could mean the Bank of Israel
will cut rates."
The yield on the 6.5% Shahar due Jan. 2016 declined 4 basis points to 5.07%, according to data compiled by Bloomberg. The price of the note, which moves inversely to the yield, added 31 agorot, or NIS 0.31 per NIS 100 face amount, to 111.16.
The Finance Ministry on Tuesday sold NIS 5.5b. of one- year Treasury bills, with a yield of 4.23%.
The shekel snapped a four-day winning run against the dollar, falling to a Bank of Israel fixing of 4.1240 from 4.1235 late Monday, and was trading at 4.1264 at 5:20 p.m.
US stocks were little changed Tuesday afternoon as investors braced themselves for the first-quarter earnings season, which kicked off with results from aluminum producer Alcoa Inc. after the close.
The market is "a bit cautious as we enter into the earning season," said Robert Pavlik, chief investment officer at Oaktree Asset Management.
A profit-warning from Seagate Technology and a bleak view of the spring sales from homebuilder D.R. Horton Inc. also kept investor enthusiasm well curbed.
The Dow Jones Industrial Average was down 3 points to 12,566.46, while the S&P 500 index rose 3 points to 1,447 and the Nasdaq Composite Index rose 4 points to 2,473.
"This earnings season should be interesting," said Sam Stovall, senior investment strategist at Standard & Poor's. "We see earnings for (S&P 500 companies) increasing about 5%, down from the 8% we first thought we'd see."
European stocks rallied to a 6 1/2-year high as takeovers lifted property and auto shares and a surge in metal prices buoyed mining companies. The Dow Jones Stoxx 600 Index rose for a fifth day, adding 0.6% to 382.5 in London, the Stoxx 50 climbed 0.6% and the Euro Stoxx 50, a measure for the 13 nations sharing the euro, added 0.7%. National benchmarks rose in all of 18 markets in western Europe, except Iceland. France's CAC 40 climbed 0.4%, Germany's DAX advanced 0.9% and the UK's FTSE 100 added 0.3% to 6417.8.
Asian stocks climbed to a six-week high, buoyed by record takeover proposals in Australia for Coles Group Ltd. and Rinker Group Ltd.
"The takeover theme has been one of the main drivers of the market for about a year, and it doesn't look like it's over just yet," said Jason Teh, who helps manage about $4.3b. at Investors Mutual Ltd. in Sydney.
The Morgan Stanley Capital International Asia-Pacific Index added 0.5% to 147.68 as of 7:13 p.m. in Tokyo, its highest since February 27. Japan's Nikkei 225 Stock Average slid 0.5% from a six-week high to 17,664.69 while the broader Topix dropped 0.1% to 1,735.69. Benchmarks in Australia, China and Singapore closed at records. Other measures gained, except in South Korea, Taiwan and New Zealand.
Toyota Motor Corp. and Taiwan Semiconductor Manufacturing Co. fell as some investors judged recent gains to be excessive.
Coles, Australia's second-biggest retailer, climbed 2.1% after Kohlberg, Kravis & Roberts Co. told the company it may top a A$19.7 billion takeover offer from Wesfarmers Ltd. The Coles board on Monday recommended that shareholders not sell their shares following Wesfarmers's offer last week.
The euro advanced to a record against the yen and a two-year high against the dollar as signs of faster economic growth in Europe prompted traders to boost bets on higher interest rates. The euro gained as investors added to wagers the European Central Bank will lift borrowing costs from 3.75% as soon as this week. The euro rose 0.65% to $1.3441 against the dollar late morning in New York after touching $1.3455, the highest since March 2005. The euro gained 0.42% to 160.02 yen, touching an all-time high of 160.10. The yen rose 0.21% to 119.07 per dollar.
Crude-oil futures rose 53 cents to $62.03 a barrel on the New York Mercantile Exchange.
Gold received a lift from both rising oil and a falling dollar, rising $8.10 to $685.10 an ounce.
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