Tel Aviv shares rise despite continued Israel-Hamas fighting

TEL AVIV Sun Nov 18, 2012 5:05am EST

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TEL AVIV Nov 18 (Reuters) - Tel Aviv shares rose for the first time in nearly two weeks on Sunday, as investors believe fighting between Israel and Palestinian militants in the Gaza Strip will not impact the local economy.

The broad Tel Aviv 100 index was up 0.4 percent at 1049.28 points at midday trade in very light turnover of 170 million shekels ($43 million). The index last rose on Nov. 6. Since then, it has lost about 3.5 percent.

The blue chip TA-25 was up 0.6 percent.

Fighting between Israel and Palestinian militants continued for a fifth straight day, with Hamas firing two rockets at Tel Aviv, but Israel's Iron Dome air shield shot them down. Israel, meanwhile, continued to strike at militant targets in Gaza.

Steven Shein, a trader at the Psagot brokerage, said investors had braced for the worst ahead of the weekend - rocket fire hitting Tel Aviv and a ground invasion of Gaza by Israeli troops to stop Hamas rocket fire into Israel.

"The big fear was a hit on Tel Aviv and central Israel, but they failed because Israel has got the defence system working," he said, adding that the market has also been encouraged by talk of a possible cease-fire in the near term.

"The general feeling is that the economy is resilient to this scope of the conflict," he said.

He added that even when the market fell on Wednesday and Thursday at the outset of the conflict, declines were muted.

Still, should fighting escalate throughout the day foreign investors may opt to sell when they re-enter the market on Monday, Shein said.

Government bond prices also rose modestly. The foreign exchange market is closed on Sunday. The shekel was fixed at 3.9520 on Friday, unchanged from Thursday. (Reporting by Steven Scheer; Editing by Tova Cohen)

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