Tel Aviv Stock Exchange dives as IDF begins Gaza City op, PM says Israel to be ‘Sparta’

Shares on the Tel Aviv Stock Exchange plunge after Prime Minister Benjamin Netanyahu confirms that Israel has started a major Gaza City offensive and says Israel must become a modern-day “Sparta.”

The Tel Aviv Stock Exchange’s benchmark TA-125 index drops 1.8%. The TA-35 index of blue-chip companies falls 1.6%, while the TA-90 index, which tracks the shares with the highest capitalization not included in the TA-35 index, declines 2.3%. The TA-Insurance index dives 2.9%.

“The start of the Gaza City offensive is a disappointment to investors after expectations for a potential ceasefire fueled Tel Aviv stock indexes to record highs in August,” Leader Capital Markets chief economist Jonathan Katz tells The Times of Israel. “The offensive means that war costs will continue, spending will need to be increased, and the budget deficit will be higher, which is negative for Israel’s credit rating.”

Netanyahu’s statements on Monday that Israel was facing the threat of diplomatic isolation over the war in Gaza, and needs to become a “Super Sparta” and be self-reliant, were also blasted by manufacturers, the High-Tech for Israel Forum, and business representatives of major Israeli companies..

“The negative sentiment is also impacted by Netanyahu’s comments about Israel facing the threat of isolation and the need to be self-reliant, which in turn, has potential implications for higher fiscal spending into the defense industry,” Katz adds.