Norway’s $2 trillion sovereign wealth fund, the largest in the world, has reported a profit of 698 billion Norwegian krones ($68.2bn) for the first half of the year — a day after announcing it would cut ties with Israeli asset managers and divest parts of its portfolio over the war on Gaza.

The fund’s 5.7 per cent return for January-June was driven by strong stock market performance, “particularly in the financial sector”, CEO Nicolai Tangen said.

On Monday, the fund said it had terminated contracts with asset managers handling Israeli investments following an urgent review. It also confirmed partial divestment over the situation in Gaza and the occupied West Bank.

The fund faced criticism for holding shares in an Israeli company supplying parts for fighter jets used in Gaza.

“The war in Gaza is contrary to international law and is causing terrible suffering, so it is understandable that questions are being raised about the fund’s investments,” Finance Minister Jens Stoltenberg said last week.