Tel Aviv Stock Exchange Plunges Amid Global Bond Yield Surge

The Tel Aviv Stock Exchange concluded its trading week with sharp declines, mirroring negative sentiment in global markets. The TA-35 index fell by approximately 1.3%, and the TA-90 index dropped by about 1.8%. The Israeli Shekel also weakened against the US Dollar, trading just below 3.04 shekels per dollar at market close.

These downturns occurred against a backdrop of soaring bond yields in the US and other developed nations, reaching multi-decade highs. Factors contributing to this global trend include rising national debts, energy shocks, geopolitical tensions, and persistent inflation fears. The US 10-year bond yield hit a 19-year peak, while the 30-year yield reached its highest point since 2004.

Across the board, industry-specific indices in Tel Aviv ended the day in negative territory. The Cleantech index was particularly hard-hit, losing around 3.5%. This decline in renewable energy stocks was attributed to rising US government bond yields and expectations of further interest rate hikes, which increase financing costs for these companies. A market correction also played a role, following a significant 56% surge in these stocks over the past year.

Other sectors also experienced losses, with Infrastructure and Real Estate indices falling over 2%. The Oil and Gas index weakened by approximately 1.7%, while Construction and Insurance indices each dropped about 1.5%. Only a handful of stocks within the TA-35 index, including Palo Alto, Kamatech, Next Vision, Nova, and Bezeq, managed to close in positive territory.

Despite a slight retreat in US bond yields towards the end of the trading day, pressure was also felt in the local bond market. The Tel-Gov Shekel 10+ index decreased by about 0.4%, and corporate bond indices weakened by approximately 0.2%. The total trading volume for the day amounted to around 5.1 billion shekels.