While Israeli government was slamming the world powers' deal with Iran, Israel's blue-chip share index hits new record on Sunday.

The Tel Aviv Stock Exchange reacted immediately to the news of the nuclear agreement. By noon, the Te Aviv 25 index rose 0.71 percent to 1,354, surpassing its previous record of 1,344 hit last Wednesday. The broader Tel Aviv 100 index rose 0.57 percent to 1, 219.

On Sunday, after months of intensive negotiations, the P5+1 group and Iran have reached on Sunday a first-step agreement to curb Iran nuclear program in exchange for sanctions relief.

Israeli Prime Minister Benjamin Netanyahu immediately denounced the deal, saying it is an "historic mistake." The prime minister added Israel is not bound to the agreement. "Iran is committed to the destruction of Israel. Israel retains the right to defend itself by itself. Israel will not let Iran develop nuclear capabilities," he said.

However, analysts said the Israeli market has positively responded to the diplomatic achievement, as well as to the sharp gains on Wall Street on Friday.