Israeli Stock Market's Mixed Reactions to Election Results Since 2009
An analysis of the Tel Aviv 125 index shows mixed stock market reactions to Israeli election results since 2009. While initial post-election days often saw minor fluctuations, longer-term performance varied significantly, with some elections followed by sharp declines and others by substantial gains. The period around the 2020 elections was heavily impacted by the COVID-19 pandemic, and the most recent term saw a 130% rise despite a pre-October 7, 2023, dip related to judicial reform. Upcoming elections are scheduled in approximately two months, with economic issues receiving little attention in party platforms.
הידיעה ב-6 שורות · תקציר של baba
- The Tel Aviv 125 index showed varied responses to Israeli election results from 2009 to 2022.
- The 2009 elections saw an initial drop followed by a 62% annual gain.
- The March 2020 elections were followed by a sharp 18% drop due to COVID-19.
- The 2021 elections resulted in a significant 25% annual increase.
- The index rose approximately 130% over the term ending in November 2022.
- Upcoming Israeli elections are scheduled in about two months.
An analysis of the Tel Aviv 125 index's performance around Israeli election periods since 2009 reveals a varied response from the stock market to election outcomes. The study examined the index's behavior on the first trading day after elections, in the subsequent month, and over the following year, adjusting for frequent elections held as little as a year apart.
Following the February 2009 elections, the index dropped 2.5% on the first trading day and approximately 10% within the month, but subsequently surged by 62% over the year. In January 2013, the market saw a modest 0.9% rise post-election, followed by a 2.3% increase in the next month, and a 16% annual gain after an initial period of stagnation. The March 2015 elections saw a 1% rise on the first trading day and over 8% in the following month, though the index later declined 7% by March 2016.
Elections in April 2019 resulted in a 0.9% increase on the first trading day and about 3% in the next month, with a cumulative 5% rise by the September 2019 elections. The September 2019 elections saw a 0.5% rise on the first trading day and 3.5% in the following month, with the index largely returning to its September 2019 level by the March 2020 elections due to the COVID-19 pandemic.
In March 2020, the index climbed 1.3% post-election but then plummeted 18% in a month due to the pandemic. It recovered to a 9% gain by March 2021. The 2021 elections saw a slight 0.4% dip on the first trading day, followed by a 1.9% rise in the next month and a significant 25% annual increase.
Most recently, the November 2022 elections led to a 0.2% drop on the first trading day and a 3.8% decline within the month. The index fell about 5% by October 7, 2023, amid controversy over the judicial reform, but still registered a substantial 130% increase over its entire four-year term.
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