Israeli shares drop, shekel weakens as fighting with Iran restarts

Shares on the Tel Aviv Stock Exchange drop and the shekel weakens after Iran fires ballistic missiles at Israel for the first time in two months, raising concerns over renewed escalation of hostilities in the region.

The Tel Aviv Stock Exchange’s benchmark TA-125 index falls 2.4 percent in morning trading. The TA-35 index of blue-chip companies is down 2.5%. The TA-90 index, which tracks the shares with the highest capitalization not included in the TA-35 index, falls 2.2%. The TA-Finance index dives 2.8%, and the TA-Insurance index dips 3.6%.

The shekel weakens 1.4% to NIS 2.9845 per dollar, trimming the currency’s annual gain to 15%.

“It is too early to assess the magnitude of the consequences of the mutual attacks by Iran and Israel last night and this morning — and Iran-backed Houthis in Yemen joining the campaign in the early hours of the morning,” says Mizrahi Tefahot Bank chief markets economist Ronen Menahem. “There is no doubt that this is a negative development for markets in Israel and around the world, but the magnitude of the impact will depend on whether it turns out to be a limited round or a rolling renewal of hostilities.”