Israeli stock and bond prices slid and many businesses were closed on Sunday, a day after Hamas gunmen from Gaza killed hundreds of Israelis and abducted an unknown number of others.
Israeli stock and bond prices slid and many businesses were closed on Sunday, a day after Hamas gunmen from Gaza killed hundreds of Israelis and abducted an unknown number of others.
Key Tel Aviv share indices ended nearly 7% lower, led by a 9% drop in banking shares on turnover of 2.2 billion shekels ($573 million), and government bond prices fell as much as 3% in the market’s initial response to the bloodiest attack on Israel in decades.
While the foreign exchange market is closed on Sundays, the shekel is already at its weakest level of the year due to a highly contested government plan to overhaul the judiciary.
“This round of violence is expected to be more prolonged and severe than previous ones, clearly having a more negative impact on the economy and the fiscal budget,” said Jonathan Katz, chief economist at Leader Capital Markets.
“The shekel will most likely weaken sharply tomorrow and we see a high probability that at some point the Bank of Israel will sell FX.”
Gunmen from the Palestinian group Hamas rampaged through Israeli towns on Saturday, killing at least 400 Israelis, before abducting dozens of hostages and returning to Gaza.
