May 28 (Bloomberg) -- Israel’s shares advanced the most in more than three months after the central bank cut interest rates for a second time in two weeks and as companies reported higher quarterly profits.
The benchmark TA-25 Index rose 1.3 percent to 1,241.17 at the close today, the highest level since April 2. Foodmaker Strauss Group Ltd. jumped 4.6 percent, leading the gains in Tel Aviv, after it said quarterly profit almost doubled. Israel Discount Bank Ltd., the country’s third-largest bank, surged 3.3 percent.
The Bank of Israel, led by Governor Stanley Fischer, yesterday cut the base lending rate by a quarter point to 1.25 percent, the lowest in more than three years. Gazit-Globe Ltd. said quarterly profit jumped 34 percent and Mizrahi Tefahot Bank Ltd. reported a 12 percent increase in profit as bad loan provisions dropped amid an improvement in the nation’s business credit quality.
“There’s a positive momentum in the market following the rate cut and the positive earning reports in the morning,” Zach Herzog, head of international sales at Psagot Investment House Ltd. in Tel Aviv, said today by phone. “Together with the strong European markets and positive U.S. futures it’s giving investors confidence.”
The MSCI Europe Index gained 1.3 percent and the Standard and Poors’ 500 Index futures climbed 0.8 percent today. The central bank said yesterday the rate cut is intended to narrow gaps with rates in major economies and “weaken the forces” driving the Israeli currency’s advance. Exports make up about 40 percent of Israel’s economy and are hurt by a stronger shekel, which has surged 3.8 percent in the past six months.
Gazit-Globe Ltd., a real estate company, advanced 2.8 percent to 51.19 shekels, the highest level in more than five years. Mizrahi Tefahot Bank Ltd., the country’s fourth-largest bank, gained 2.3 percent, the most since Jan. 31, to 38.35 shekels.
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