Tel Aviv stocks fall up to 3.5%, shekel weakens against the dollar as election results come in
The yield on 10-year government bonds rose 6 basis points to 4.1%. Fuel prices, to be announced Thursday, were forecast to bring a liter of 95-octane gasoline close to 9 shekels
The Tel Aviv Stock Exchange opened sharply lower Wednesday in its first trading session since election results began coming in, and the shekel weakened against the dollar and the euro. The TA-90 index fell about 3% to 3.5%, the TA-125 about 1.8% to 2.1% and the TA-35 about 1.4% to 1.7%. On Monday, just before the election, the market had gained nearly 2%.
Selling was concentrated in financial and real estate stocks. The banking index lost about 3%, insurance shares fell between 3.6% and 3.8%, and the construction index dropped about 4%.
Harel fell 4.74%, Migdal 4.38%, Clal Insurance 4.33%, and Phoenix 3.87%, while real estate firms Melisron and Azrieli lost more than 4%. The yield on 10-year government bonds rose 6 basis points to 4.1%.
The dollar rose to around 3.09 shekels, after falling to 3.02 during Tuesday’s election. The trend reversed after the exit polls were released and accelerated as vote counts came in. The dollar is now above Monday’s representative rate of 3.07 shekels. The euro, which had fallen as low as 3.37 shekels, traded at about 3.42 to 3.44.
Joseph Fraiman, CEO of risk management firm Prico Group, attributed the swings to the changing picture of the results, according to Ynet. He said the shekel strengthened Tuesday evening on optimism among the bloc seeking political change, and weakened again when updated figures showed Netanyahu’s bloc gaining strength. He said final results showing a majority for Netanyahu’s bloc could push the dollar toward 3.20 shekels in the near term, though he expects significant foreign currency supply at 3.12 to 3.16 shekels per dollar.
The exchange rate is also expected to affect fuel prices, to be announced Thursday. Forecasts had pointed to a significant increase that would bring a liter of 95-octane gasoline close to 9 shekels.
Investors were also watching the Federal Reserve’s rate decision, with markets widely expecting it to hold its benchmark rate at 4%, with the probability of a hold estimated at around 90%.