Israeli stocks slide as election uncertainty sends shekel lower
The TA-90 fell 3% as banking, insurance and construction shares tumbled, while the yield on 10-year government bonds rose to 4.1%. The dollar climbed to around NIS 3.09 as investors weighed the preliminary election results and prepared for the Federal Reserve’s rate decision.
Israeli stocks and government bonds fell sharply as uncertainty over the election results weighed on financial markets. The TA-90 index dropped 3%, the TA-35 declined 1.4%, and the TA-125 retreated 1.8%. The banking index lost 3%, insurance stocks fell 3.6%, and the construction sector shed 4%. The sell-off came as further results continued to emerge from polling stations throughout the day. Long-term government bonds also came under pressure, pushing the yield on 10-year Israeli government bonds up 6 basis points to 4.1%.
The shekel weakened as the preliminary election results heightened uncertainty. The dollar rose to around NIS 3.09, while the euro gained to more than NIS 3.42.
In international markets, the dollar index edged up 0.1% to 102.4. The euro slipped 0.1% to above $1.11, the pound fell 0.2% to below $1.33, and the dollar traded at around 157.9 yen.
Investors were also focused on the Federal Reserve’s upcoming interest-rate decision. Markets widely expected the Fed to leave its benchmark rate unchanged at 4%, with the probability of a hold estimated at around 90%. Market pricing pointed to a possible rate hike in December, a pause in January and another increase in March, although the outlook remained subject to incoming economic data.
U.S. inflation reached an annual rate of 3.7% in September, driven largely by energy prices, while core inflation stood at 2.6%. Housing remained under pressure from elevated mortgage rates, even as layoffs remained relatively low.
