Israeli Markets Plunge Amid Election Uncertainty and Unclear Results

Stock indices fell across the board, with the TA-125 index dropping between 1.75% and 2.1%, the TA-90 index falling between 3% and 3.5%, and the TA-35 index declining between 1.4% and 1.7%. The banking index dropped approximately 3%, while insurance stocks fell between 3.6% and 3.8%, and the construction index lost about 4%. Major firms, including Harel, Migdal, Clal Insurance, Phoenix, Melisron, and Azrieli, all experienced losses exceeding 3.5% to 4%.

In the foreign exchange market, the shekel weakened against major currencies. The US dollar rose to around 3.09 shekels, nearing 3.1, after trading as low as 3.02 shekels on election day. The euro also strengthened, trading between 3.42 shekels. Analysts noted that the dollar's rise accelerated as vote counts confirmed a lead for Benjamin Netanyahu's bloc, and some predict the dollar could reach 3.20 shekels if his bloc secures a majority. The weakening shekel is also expected to influence upcoming fuel price hikes on Thursday.

According to Ynet, the election results have created political uncertainty regarding government formation, budget approval, and the national deficit. Eldad Tamir of Tamir Fishman Investment House described the situation as a dead end, noting that investors dislike political instability and that foreign investors are exiting the local market. While some investors are debating whether to sell, investment professionals advise focusing on long-term prospects, with Uri Ben Dov stating that the stock market remains overvalued compared to its historical averages.