Tel Aviv Stock Exchange Falls in First Trading Session Post-Election
Translated & summarized from NEWSru Israel by baba
The Tel Aviv Stock Exchange opened down on Wednesday, October 28th, after the Knesset elections, with major indices like TA-35 and TA-125 falling significantly. Insurance, real estate, and banking sectors saw notable declines as investors reacted to uncertain election results. Preliminary counts suggest no bloc has a majority, potentially leading to lengthy coalition talks or new elections. Historical data shows mixed short-term market performance after elections, with initial gains often followed by losses before a longer-term recovery.
The story in 6 lines · by baba
- Tel Aviv Stock Exchange indices fell sharply on October 28th, the first trading day after the Knesset elections.
- The TA-35 index dropped 1.5% and TA-125 fell 1.9% by mid-morning.
- Insurance, real estate, and banking stocks experienced significant declines.
- Uncertain election results, with no bloc securing a majority, are driving investor reactions.
- Preliminary results show Netanyahu's bloc with 54 seats, Eisenkot's with 48, and Arab parties with 18.
- Market analysis indicates increased volatility and mixed performance in the weeks following elections.
The Tel Aviv Stock Exchange opened on Wednesday, October 28th, with a decline in stock prices, marking the first trading session following the 26th Knesset elections. The exchange was closed on election day, Tuesday. Initially, the TA-35 index dropped by 1.3%, the TA-125 by 1.7%, and the TA-90 by nearly 3%. By 10:30 AM, the decline had deepened, with the TA-125 losing 1.9% and the TA-35 down 1.5%. Insurance and real estate companies experienced the most significant drops, with their respective industry indices falling over 4%, while the banking index decreased by 2.5%. Investors are reacting to preliminary election results indicating no single bloc has secured a majority. With 66.3% of votes counted, Netanyahu's bloc has 54 seats, Eisenkot's bloc has 48, and Arab parties have 18. This outcome suggests prolonged coalition negotiations or the possibility of new elections. In the preceding Monday, ahead of the elections, the market had anticipated a clearer result, with the TA-35 rising 1.99% and the TA-125 increasing by 1.81%, accompanied by a stock trading turnover of approximately 4.93 billion shekels. Stocks of companies with dual listings also returned to trading. Prior to the opening, "Tower" shares were expected to rise by 4.77%, "Teva" by 2.36%, and "Can-Fit BioPharm" was projected to fall by about 8.2%. An analysis by the exchange's research department of market dynamics following the last ten elections revealed that the TA-35 index typically rose by an average of 0.58% on the first trading day after an election. However, by the end of the first week, cumulative returns turned negative, averaging -0.89%. Within a month, the index showed an average growth of 1.72%. Volatility in the leading indices tends to increase by up to 45% in the weeks following elections compared to a regular trading week.
