Trading on Tel Aviv stock exchange halted as major indices plunge over 7%

Tel Aviv 35 drops 8%, Tel Aviv 125 nearly as much; falls in keeping with drops around the globe as central banks struggle to respond to collapse in trade

A stock market ticker screen in the lobby of the Tel Aviv Stock Exchange, in the center of Tel Aviv, March 15, 2020. (Flash90)
Illustrative: A stock market ticker screen in the lobby of the Tel Aviv Stock Exchange, in the center of Tel Aviv, March 15, 2020. (Flash90)

Trading on the Tel Aviv stock exchange was halted for half an hour Monday after the Tel Aviv 35 index of the top 35 traded companies plummeted 8 percent.

The Tel Aviv 125 index also dropped more than 7%.

Among the companies hardest hit was the Fattal hotel chain, whose shares went into free fall, plunging 29%, while oil and gas exploration firm Energean, which is developing some of Israel’s offshore natural gas fields, dropped 24%.

Global stock markets fell together with US futures after the American Federal Reserve’s moves to shore up economic growth failed to dispel investors’ fears over anti-virus controls that are shutting down global business and travel.

There were no glimmers of optimism: In addition to the falls in Tel Aviv, Paris tumbled 9% shortly after the open, London sank 7% and Frankfurt gave up 7.5%. In Asian trading, Sydney’s benchmark plunged 9.7%, Hong Kong’s Hang Seng lost 3.4% and India shed 5.9%.

Tokyo closed 2.5% lower after Japan’s central bank expanded asset purchases to inject money into the economy and promised no-interest loans to help companies cope with the crisis. Chinese shares fell after Beijing reported consumer spending and factory output were even worse than expected.

On Wall Street, futures for the benchmark S&P 500 index and Dow Jones Industrial Average were off nearly 5% following Sunday’s emergency rate cut by the Federal Reserve.

The Fed cut its key rate by a full percentage point — to a range between zero and 0.25%. The central bank said it would stay there until it feels confident the economy can survive a near-shutdown of activity in the United States.

A Wall Street trader reacts to plunging stock prices on the floor of the New York Stock Exchange, March 9, 2020. (AP/Richard Drew)

“Despite whipping out the big guns,” the Fed’s action is “falling short of being the decisive backstop for markets,” said Vishnu Varathan of Mizuho Bank in a report. “Markets might have perceived the Fed’s response as panic, feeding into its own fears.”

The Fed action came as governments expanded travel curbs and closed more public facilities, raising the cost of efforts to contain the outbreak that has infected nearly 170,000 people worldwide. China, where the coronavirus emerged in December, accounts for about half of those, but a dozen other countries have more than 1,000 cases each.

London’s benchmark FTSE 100 index lost 6.9% to 4,995.46. Frankfurt’s DAX shed 7.6% to 8,532.05. The CAC 40 in France sank 8.8% to 3,755.99.

The S&P 500 future was down 4.8% and the Dow’s was off 4.6%. The S&P 500 future fell 5% on Sunday night following the Fed’s announcement, triggering a temporary trading halt.

The Fed said it also will buy at least $500 billion of Treasury securities and $200 billion of mortgage-backed securities. This amounts to an effort to ease market disruptions that have made it harder for banks and large investors to sell Treasuries and to keep longer-term rates borrowing rates down.

That followed a dizzying week in which the Dow twice fell by more than 2,000 points and also record its biggest point gain ever — 1,985 points on Friday. The bull market that began in 2009 in the depths of the financial crisis came to an end.

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