Israeli stocks fell from a record on Monday after faster-than-forecast inflation raised concern that the central bank will increase interest rates.
Partner Communications Ltd. and Cellcom Israel Ltd. led the retreat.
The TA-25 Index lost 5.90, or 0.5 percent, to 1,154.94 at the close in Tel Aviv, as 18 shares dropped, and eight gained.
Investors traded about NIS 1.64 billion in shares and convertibles.
Israel's consumer price index rose 0.7% in June from May after the shekel lost as much as 9% of its value against the dollar, the central bureau of statistics reported late Sunday. The monthly gain was the biggest since April 2006, and above the 0.4% gain forecast by a Bloomberg News survey.
"The higher-than-expected CPI will no doubt spook the Bank of Israel," Excellence Nessuah Securities & Investments Ltd. wrote in a morning note to investors, adding their forecast was a 0.3% gain. "The likelihood of an interest rate increase in the next couple of months is substantially increased in the wake of June's CPI."
Partner, the country's second-largest wireless provider, declined NIS 0.93, or 1.3%, to NIS 69.86. Cellcom, the country's largest, fell NIS 2.70, or 2.4%, to NIS 111.90.
Can Fite Biopharma Ltd., a biopharmaceutical company, surged NIS 0.14, or 10%, to NIS 1.50. The clinical trial for a drug for rheumatoid arthritis supported the company's plans to continue the treatment's development, the Petah Tikva-based company said in a statement to the stock exchange.
Delek Group Ltd., a holding company with interest in energy and real estate, gained NIS 7, or 0.7%, to NIS 1,075. Delek's US unit, Delek US Holdings Inc., agreed to buy a 28% stake in Lion Oil Co. in a cash and share transaction worth about $121 million.
Separately, Delek's price estimate was raised to NIS 1,210 from NIS 1,100 at UBS AG, citing an "upside potential" in Delek's holdings.
Pointer Telocation Ltd. jumped NIS 2.40, or 6.4%, to NIS 39.97. The provider of vehicle location services agreed to buy Cellocator Ltd. for $18.5m.
US stock indexes rose to records for a third day on a jump in New York state manufacturing and earnings results from Eaton Corp. and McDonald's Corp. that beat analysts' estimates.
Eaton, the world's second-largest maker of hydraulic equipment, surged the most in the Standard & Poor's 500 Index after increasing its full-year profit forecast. Verizon Communications Inc., the second-biggest US phone company, climbed after the Financial Times said Vodafone Group Plc may pursue a $160b. takeover.
The Federal Reserve Bank of New York's general economic index advanced to its highest in a year, indicating that a manufacturing rebound may help the economy overcome a housing slump.
The S&P 500 added 2.12, or 0.1%, to 1,554.62 as of late morning trading in New York. The Dow average advanced 57.88, or 0.4%, to 13,965.13. The Nasdaq Composite Index increased 2.29, or 0.1%, to 2,709.29.
European stocks rose, led by ABN Amro Holding NV after Royal Bank of Scotland Group Plc sweetened its â‚¬71.1b offer for the Dutch lender.
Europe's Dow Jones Stoxx 600 Index added 0.2% to 399.68 as of 4:30 p.m. in London, with 11 of 18 industry groups advancing.
National benchmarks climbed in 12 of the 18 western European markets. The UK's FTSE 100 fell 0.3% to 6,697.70, France's CAC 40 increased 0.1%, while Germany's DAX also advanced 0.1%.
The Stoxx 50 gained 0.2%, and the Euro Stoxx 50, a measure for the euro region, climbed 0.3%.
Asian stocks fell, dragging a regional benchmark from a record, as a slide in technology shares countered gains in energy-related companies.
Samsung Electronics Co., which ended last week at a 15-month high, plunged the most in three years after memory-chip prices fell. Hon Hai Precision Industry Co., the world's largest contract electronics manufacturer, slid the most in four months after a newspaper said it may buy a stake in LG.Philips LCD Co.
Benchmarks in South Korea and Taiwan, the markets with the highest technology weightings in Asia, both fell for the first time in three days. India was the only regional market to advance, while Japan was shut for a holiday.
The Morgan Stanley Capital International Asia Pacific excluding Japan Index lost 0.4% to 494.34 at 6:18 p.m. in Hong Kong, after ending last week at a high.
The shekel fell to 4.2907 versus the dollar from 4.2708 late Sunday. The shekel has been the worst performer against the dollar in the past month, according to Bloomberg data.
The dollar rose from near a record low versus the euro, trading at $1.3775 per euro during late morning action in New York, from $1.3782 on July 13, when it touched a record low of $1.3814. The dollar rose to 122.03 yen from 121.93 yen on July 13.
Crude oil for August delivery on the New York Mercantile Exchange rose 32 cents, or 0.4%, to $74.25 a barrel. The Futures reached $74.44, the highest intraday price since August 11. Oil has climbed 22% this year.
Gold futures rose on the Comex division of the NYMEX, as continuing weakness in the dollar against other major currencies and crude's move past $74 a barrel underpinned demand for the precious metal.
Gold for August delivery was last up 70 cents to $668 an ounce after trading as high as $669.50 during morning trading.