Israel stocks up due to rate cut and better outlook

Good economic news for Israel.

By Robert Daniel, MarketWatch

TEL AVIV (MarketWatch) - Israeli stocks rose after the Bank of Israel surprised the capital markets with a sharper-than-expected interest-rate cut, then followed up by lifting its economic-growth estimates and cutting its expected unemployment rate.

The Bank of Israel's rate cut - half a percentage point to 4.5% instead of the widely expected quarter point -- also had a bit of the effect Israel's manufacturers had hoped for, as the shekel, which has hammered the dollar this year, weakened. The bank had cited lower-than-target inflation and the shekel's strength against the dollar for the reduction.

The Tel Aviv Stock Exchange's benchmark TA-25 index rose 0.61% to 937.03, the TA-100 index added 0.59% to 933.08, and the Tel-Tech index of 15 top technology issues tacked on 1% to 365.36.