Tel Aviv Stock Exchange Plunges, Shekel Weakens Post-Election

The Tel Aviv Stock Exchange opened with significant declines on October 28, 2026, for the first time since the final election results were announced. The TA 90 index dropped over 3%, the TA 125 fell by 2%, and the TA 35 lost more than 1.5%. This downturn follows sharp gains of nearly 2% recorded on the Monday before the election.

Concurrently, the Israeli shekel weakened considerably, reversing earlier gains. The dollar climbed approximately 1.3% against the shekel, returning to trade around 3.09 shekels. The euro also saw a similar rise, approaching 3.36 shekels. This currency movement began on election day afternoon, with the dollar climbing from a low of about 3.02 shekels to a morning gain of roughly 2.4% from its lowest point.

The shekel's depreciation is notable when compared to global currency markets. While the dollar and euro rose against the shekel by similar margins, the global dollar index remained stable or saw a slight increase, and the euro showed minimal change against the dollar. This suggests the primary driver of the movement is the shekel's own weakening, rather than solely global currency fluctuations.

The market's reaction appears linked to the political uncertainty following the election. Initial polls and exit polls had suggested a potential advantage for the "Izankot bloc," but the partial official results showed a lead for the "Netanyahu bloc" without securing the crucial 61-seat majority. This leaves the political landscape open and contrary to expectations of a decisive outcome.

Further market reactions are anticipated when the bond market opens, as investors begin to price in the election results and the ongoing uncertainty surrounding government formation. The stock market's performance is seen as a key indicator of investor sentiment regarding the political developments.