MarketWatch: In-depth global business coverage
Israeli stocks closed at record levels Monday, with the TA-100 joining the benchmark TA-25 index at historic highs and analysts and investors expressing strong optimism about the nation's economy.
The TA-25 rose 0.6 percent to 913.09, exceeding the record set Sunday, while the TA-100 traded up 0.76% to 925.98. Its previous closing high of 919.75 was set May 9. Meanwhile, the Tel-Tech 15 index of top technology issues climbed 1.25% to 390.14. The Tel-Tech's highest-ever reading is 482.78, set January 20, 2004.
The most active issues were Bank Hapoalim and Bank Leumi, each of which rose 0.3% and together accounted for more than a fifth of the total TASE volume of $457 million. Hapoalim finished at NIS 21.52 and Leumi at NIS 18.14.
"Foreign investors are very bullish on the Israeli economy," said Avi Weinreb, trader at Clal Finance Batucha in Tel Aviv.
He said that sentiment was based on a combination of "low inflation, falling rates and a swift recovery from the war" last summer, plus "a string of good data" including a negative CPI, falling unemployment and possibly a surprisingly strong reading for second-half gross domestic product, due to the rebound from the war.
Daniel Rapoport, international institutional salesman and trader at Leader & Co. Investment House in Tel Aviv, said the 2007 budget appeared as if it will go through without a problem. He said the governing coalition appeared stable, and the market had confidence in Finance Minister Avraham Hirchson.
The third-quarter reporting season had seen no significant profit warnings except for Retalix, the producer of management systems for supermarkets and distributors, Rapoport said.
Retalix shares, a member of the Tel-Tech, closed down 0.7% at NIS 69.79 in Monday's dealings.
Meanwhile, the conflict with the Palestinians and the efforts by the Palestinian Authority to form a coalition government are not affecting the market too much, analysts say.
"The market stopped looking that way a long time ago," Weinreb said. "There's no peace dividend priced in."
"As for the TASE's prospects from here, banks should be the driver," Rapoport said, adding that the sector was looking good from a technical perspective and had underperformed the Tel Aviv market in the year to date. Real estate up to now had been "a very robust engine" for the TASE, he said.
For the third quarter, Bank Hapoalim and Bank Leumi should report substantial capital gains and nice dividends on the back of sales generated by their mutual-fund units, Rapoport said.
Merrill Lynch on Monday reiterated Bank Hapoalim as a buy, saying it is "our preferred way of investing in domestic macroeconomic and social trends."
The Tel Aviv Financials Index rose 0.33% to 1,207.2.
The shekel weakened to 4.31 to the US dollar from 4.29 on Friday.
US stocks rallied Monday, with the technology sector pacing the advance on a string of deals and positive remarks on the economy from a Fed official, with shares of Four Seasons Hotel Inc. surging on a $3.7 billion takeover offer.
The Dow Jones Industrial Average was up 95 points, or 0.8%, at 12,081.21 in midday trading. The Nasdaq Composite Index gained 32 points, or 1.4%, to 2,363, while the S&P 500 Index was up 13 points, or 1%, at 1,377.
European shares closed higher Monday, boosted by earnings from companies, including low-cost carrier Ryanair Holdings, and news of deals both in Europe and the US. The pan-European Dow Jones Stoxx 600 index rose 1.05% to 358.05, with the travel and leisure sector performing well.
The UK's FTSE 100 index closed up 1.24% to 6,224.50, the German DAX Xetra 30 index increased 1.43% to 6,330.65 and the French CAC-40 index advanced 1.24% to 5,402.36.
Asian shares were back on a record-setting pace Monday, with indexes in Indonesia, Hong Kong and Australia setting new highs. Trading in Japan and South Korea was subdued, but a weaker yen helped lift the Nikkei 225 Average into positive territory as investors as sought out export-related shares such as automakers Toyota and Honda.
The Nikkei 225 ended 0.1% higher at 16,364.76, but the broader Tokyo Stock Price Index, or Topix, was down 0.1% to 1,616.71.
Indonesia's JSX Composite jumped 1.7%, setting a fresh record closing high for a sixth consecutive session on strength in banking shares ahead of an expected interest-rate cut this week. Hong Kong's Hang Seng Index set an intraday record before easing slightly to end up 186.86 points, or 1%, at 18,935.55.
Australia's S&P/ASX 200 rose 0.2% to close at a record 5,444.10 on gains in energy and financials.
The dollar gained some ground against major rivals Monday, moving up after Federal Reserve Bank of Chicago chief Michael Moskow warned that more US interest-rate hikes could be on the way to help combat inflation. Higher interest rates enhance the dollar's standing.
The euro was quoted at $1.2710 Monday morning, down from $1.2716 in Friday's late trading. The dollar stood at 118.36 Japanese yen, up from 118.19 yen late Friday.
Crude-oil futures climbed Monday morning, with traders attempting to recoup part of last week's almost 3% loss after comments from key oil producers fed expectations that the Organization of the Petroleum Exporting Countries will decide to cut output further at a meeting next month.
Crude for December delivery was up 41 cents at $59.55 a barrel on the New York Mercantile Exchange.
Gold futures headed lower Monday morning as safe-haven buying of the precious metal eased a bit after last week's gain of nearly 5%. Gold for December delivery fell by 90 cents to stand at $628.30 an ounce on the NYMEX.
MarketWatch: In-depth global business coverage