Domestic shares suffered substantial declines across banking, insurance, and real estate, though trading staged a partial recovery by Thursday morning. Simultaneously, the Israeli shekel weakened against both the US dollar and the euro, interrupting several months of robust performance. The instability was intensified by an inconclusive race leaving Prime Minister Benjamin Netanyahu’s bloc with 53 seats against 48 for the opposition bloc led by Gadi Eisenkot. Furthermore, central bank officials firmly rejected Netanyahu's suggestion to utilize crypto assets to offset foreign sanctions.
Key points
Inconclusive election results and the threat of political deadlock directly triggered sha…: Inconclusive election results and the threat of political deadlock directly triggered sharp downturns across multiple financial sectors.
Israel's Central Bank officially pushed back against proposals advocating the use of cryp…: Israel's Central Bank officially pushed back against proposals advocating the use of cryptocurrency to diminish international sanctions.
Domestic economists warned against adopting crypto strategies by noting their prevalent u…: Domestic economists warned against adopting crypto strategies by noting their prevalent usage among international criminal organizations.
Sources checked by our analysis pipeline: 1
High volatility has been recorded since Israel’s elections on Tuesday, with the Tel Aviv Stock Exchange’s main indices fluctuating throughout Wednesday and into Thursday morning, the Israeli economic daily TheMarker reported.
According to the report, sharp declines were recorded on Wednesday in the TA-35 and TA-125, two of the local stock exchange's main indices, which fell by 1.8 percent and 2.5 percent respectively. On Thursday morning, however, the indices showed some recovery, the outlet noted.
Nissan Avraham, an Israeli economic expert, told TheMarker that "part of the decline reflects a correction of the optimistic expectations that had built up ahead of the vote", adding that the market had wanted a clear political resolution.
"The possibility of a deadlock and prolonged uncertainty weighed on trading," Avraham said, referring to the inconclusive results of the Israeli elections.
Nevertheless, Avraham said that past experience indicates that the Israeli stock exchange usually bounces back from sharp declines.
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