(Updates with closing prices in second paragraph.)
Sept. 29 (Bloomberg) -- Israel’s benchmark gauge closed at the highest level in more than two years on the prospects for progress of U.S. nuclear talks with Iran.
The TA-25 Index advanced 1.2 percent to 1,270.93, the highest level since May 2011, at the close in Tel Aviv. Israel Chemicals Ltd., the country’s 10th-largest private sector employer, and defense developer Elbit Systems Ltd. led the gains, rising 5.8 percent and 5.5 percent, respectively. The index has advanced 7.2 percent this year compared with a 16 percent gain on the MSCI World Index.
President Barack Obama phoned his Iranian counterpart, Hassan Rouhani, to discuss the outlook for nuclear talks in the first contact between the countries’ leaders in decades. Obama told reporters at the White House that there’s a “unique opportunity” to reach an agreement. Separately, last week Standard & Poor’s affirmed Israel’s ratings at A+/A-1 with a stable outlook, reflecting a “prosperous and diverse economy” and the impact of natural gas production on its external account.
“The positive weekend noise about the high-level contact between U.S. and Iranian officials may lead some investors to lower the risk premium in Israel,” Zach Herzog, head of international sales at Psagot Investment House Ltd., said today by phone. “A broad Middle East war sparked by an Israeli attack on Iran has been weighing on foreign investors for some time.”
Iran’s pursuit of nuclear technology has led Obama and his allies in Europe to tighten economic sanctions, and the U.S. and Israel to threaten military action, to prevent the Islamic republic from obtaining nuclear weapons.
--Editor: Robert Lakin