MSCI Inc. is considering including Israeli stocks to its European index and is seeking feedback from investors, the New York-based index provider said.

MSCI reclassified Israel as a developed market from emerging-market status in 2010 and based on “participant feedback” didn’t include the MSCI Israel Index (MXIL) in the MSCI Europe Index, it said in a statement yesterday. Instead, it created the MSCI Europe + Middle East Index as a new regional developed market index.

Upgrades at MSCI could lead to the nation’s equities luring more of the investor assets that follow the provider’s gauges. The Tel-Aviv Stock Exchange’s Chief Executive Officer Ester Levanon said in May the bourse is seeking to move to the MSCI Europe index to boost trading volumes. An e-mailed message sent to the bourse seeking comment wasn’t immediately replied today.

“The addition of Israel to any significantly tracked MSCI index should be a market positive,” Saar Golan, the head of equities trading at Clal Finance Batucha Brokerage Ltd., said in an e-mail today. “Israel would be a minor component, but it would mean an inflow of funds into MSCI Israel stocks.”

The benchmark TA-25 Index (TA-25) has risen 26 percent since June 2009 when MSCI announced the upgrade to developed-market status. That compares with a 61 percent rally for the Nasdaq Composite Index. (CCMP)

To contact the reporter on this story: Shoshanna Solomon in Tel Aviv at ssolomon22@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net