Tel Aviv shares fall amid renewed fighting in Gaza

Shares on the Tel Aviv Stock Exchange fell in response to a flareup of violence in Gaza, fueling investor uncertainty over a recently brokered ceasefire agreement between Israel and the Hamas terror group.

The Tel Aviv Stock Exchange’s benchmark TA-125 index dropped 1.3 percent at the close of trading. The benchmark index has gained more than 34% so far this year, hitting numerous record highs over the past weeks, amid investor optimism for an end to the two-year war with Hamas in Gaza.

The TA-35 index of blue-chip companies was down 1.1% at the close. The TA-90 index, which tracks the shares with the highest capitalization not included in the TA-35 index, fell 1.8%. The TA-Construction dived 3.6% and TA-Insurance index dipped 2.1%.

“We are at a sensitive point in time, where every security news event raises the pressure bar of investors and creates high volatility,” says Yaniv Pagot, VP of Trading at the Tel Aviv Stock Exchange. “A return to fighting is a very bad scenario for investors, as this is a situation with economic implications, including the path of interest rates.”

“Any security escalation undermines the perception that an interest rate cut is around the corner as the Bank of Israel governor will prefer to continue to take a conservative approach,” Pagot adds.