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War and peaceand Israel's stock market
The fighting in Gaza has not deterred investors from buying into Israel's market. In fact, since July 8, the day after Israel's air strikes began, the Tel Aviv 100 (TA-100), an index of the 100 largest-cap companies in the country, has climbed by 2.3 percent. It's also up nearly 13 percent over the last 12 months. The Israeli stock market hasn't touched negative territory since February, well before the current conflict began.
The Israeli stock market's resiliency may come as a surprise, but to John Krey, an international investment analyst with S&P Capital IQ, the situation in Gaza is not as turbulent as investors may think.
"People are more confident that Israel can protect its sovereignty against these attacks," Krey said. "They've taken great pains to make sure that their industries and their people are not harmed in any material way."
Confidence isn't best reflected in equities, but in the Israeli fixed-income market. Between June 30 and July 8, 10-year Israel government bond yields rose 12 basis points, but then declined 17 basis points from July 8 to July 24, suggesting increased comfort among investors.
"That's really impressive," Krey said. "There's a remarkable change of attitude taking place here."