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Last Updated: Monday, 19 December 2005, 18:05 GMT
Sharon health scare hits shares
Israeli PM Ariel Sharon
Mr Sharon is expected to leave hospital on Tuesday
Shares in Israel have fallen by 1% from record levels following news that Prime Minister Ariel Sharon had suffered a minor stroke.

Israel's benchmark Tel Aviv index fell by 0.9% to 812.30 points on Monday, from a record high the previous day.

Mr Sharon was taken to hospital in Jerusalem on Sunday after complaining of feeling unwell.

Tests revealed the 77-year-old premier had suffered a mild stroke. He is due to leave hospital on Tuesday.

'Medical reports'

Analysts said Monday's share fall would have been steeper if investors believed Mr Sharon's life had been in danger.

"You would expect the knee-jerk reaction would be fear and panic," said Richard Gussow, senior analyst at Israeli brokers Excellence Nessuah.

"The market was calmed by the medical reports we're receiving. The market is just waiting to hear further conditions."

Israel's blue-chip index has soared by 300 points in the past three years, lifted by strong corporate profits and higher interest rates.

Mr Sharon, who has led Israel since 2001, formed a new party last month after walking out of the ruling right-wing Likud party he helped found.

He is seeking re-election as the leader of his new Kadima (Forward) party in a poll scheduled for March next year.

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