Tel Aviv stock exchange slumps amid political uncertainty

Shares on the Tel Aviv Stock Exchange drop and the shekel weakens as initial election results point to a political deadlock over the formation of the next government and the potential direction of future economic policy.

The Tel Aviv Stock Exchange’s TA-125 benchmark index slumps 1.7 percent and the TA-35 index of blue-chip companies slips 1.5%. The TA-90 index, which tracks the shares with the highest capitalization not included in the TA-35 index, falls 3%. The TA-Insurance index declines 4.1%.

The shekel weakens 1% against the dollar and is trading around NIS 3.0843 per dollar.

“There is political uncertainty as investors are awaiting finalized election results and for now there is no clear direction over the structure of the next government,” Ronen Menahem, chief markets economist for the Mizrahi Tefahot Bank, tells The Times of Israel. “Investors will be looking for a stable coalition which will be able to drive fiscal policy and make budgetary priorities that support economic growth.”