JERUSALEM, June 24 (Reuters) - Tel Aviv stocks rose to

near record highs and the shekel hit a more than two-year peak

against the dollar on Tuesday after Israel and Iran agreed to a

ceasefire following nearly two weeks of fighting.

The broad Tel Aviv 125 index was up 1.3% at midday,

while the blue chip TA-35 was also 1.3% higher, for the

market's sixth day of gains in the past seven sessions, driven

by optimism that Israel had removed a threat of Iran developing

nuclear weapons anytime soon.

After six straight sessions of gains that saw shares hit

all-time highs on Sunday, share indices declined on Monday.

Since Israel began striking Iranian nuclear facilities,

ballistic missile factories and military commanders on June 13,

the indices have risen some 8%. The United States also bombed

Iranian nuclear sites on Sunday.

Iran responded with daily missile barrages against

Israel.

The shekel appreciated 1.4% against the dollar to

3.40, its strongest level since February 2023.

Markets globally rose, oil prices plunged and the dollar

weakened on improved risk appetite after U.S. President Donald

Trump's announcement of the ceasefire. It would end 12 days of

air attacks between Israel and Iran but remains fragile.

Israel's 5-year credit default swap, which is the cost

of insuring government debt against default, dropped to 93 basis

points, 14 bps below Monday's close and the lowest since early

April, according to S&P Global Market Intelligence.

The ceasefire "is anticipated to lead, in our view, to

further positive short-term reactions in the financial markets,"

said Ofer Klein, head of economics and research at Harel

Insurance and Finance.

"As Israel's risk premium declines, we expect to see

favourable outcomes in bonds and equities, along with continued

appreciation of the shekel."

Israel's international government bonds

also rose.