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Israeli stocks crawled ahead on matza-thin turnover yesterday despite a surge by oil prices in world markets, where investors stormed gold as a refuge in these times of travail.

Wall Street stocks traded mixed but European markets were buoyant. The gains on the Continent were thin, this is true: Madrid share prices stood out with a 1.6% increase but generally the gains ranged from a hair over the flatline to 0.5%. European markets were lifted by bank stocks in anticipation that the European Central Bank will be raising eurozone interest rates.

Why did European investors pile into bank stocks? "There's been hypersensitivity on the market and especially on banks, but at the end of the day, risks related to sovereign debt have been exaggerated and banking stocks have been excessively hammered," said Marc Renaud, president and fund manager at Paris-based Mandarine Gestion.

Maybe so. Asian markets generally traded in the green but Tokyo equities slumped, losing 0.9% on concerns over Japan's industrial output in the wake of its serial disasters. The benchmark index has regained more than half the losses it posted since the devastating events of March, the earthquake and tsunami, but market players said the rebound driven mainly by foreign investors appears to have run its course.

In other world news, oil prices hit fresh peaks yesterday, rising to their highest since August 2008, buoyed by unrest in the Middle East and North Africa and dollar weakness ahead of an expected European Central Bank interest rate rise. Brent crude rose $1 to breach $123 a barrel, its highest point since August 2008, and U.S. crude rose to its highest since September 2008, above $109.

Back on the kibbutz, Tel Aviv shares also ended on the upside. The TA-25 index closed 0.6% higher at 1,335 points after spending the entire session swinging up and down - but always above the flatline. The broader TA-100 index gained the same, to end at 1,215 points. All the leading indexes were up, if not by much.

Among the perennially volatile oil & gas pack, newly tracked by the TA Oil & Gas Index, the performance was selective but relatively subdued. Cohen Development and Lapidot each gained 1.4% and Ratio fell 1.9%. The rest didn't move much.

Teva Pharmaceutical Industries gained 1% after settling the patent claim by Cubist Pharmaceuticals in a lawsuit over blockbuster antibiotic Cubicin, which is used to treat resistant bacteria commonly found in hospitals.

Delek Automotive lost 0.9% after being downgraded by Psagot. (For more on that, see Page 8. )

Elbit Systems shares lost 0.6%. The company yesterday announced winning a $24 million contract from an unnamed African country for artillery systems made by Soltam - yes, the purveyor of pots and pans.

Azrieli Group shares fell 0.4% after a report from Excellence Nessuah analysts who broadly applaud the company but have rated it Market Perform. The group delivered strong results for 2010, they say, but the good news is already in the share price.