Tel Aviv stocks fall sharply in Sunday trading

Business Materials 6 October 2008 00:37 (UTC +04:00)

Israel's main benchmarks on the Tel Aviv Stock Exchange all suffered sharp declines Sunday as government leaders tried to quell investors' concerns, reported dpa.

On the Tel Aviv 100, only two stocks rose and the remaining 98 all lost ground, with the index down 7.08 per cent for the day. The Tel Aviv 25 dropped 6.3 per cent.

Taking the hardest hit, the Real Estate 15 index fell more than 11 per cent as did the Tel-Tech 15.

Bonds registered a sharp decline, as investors questioned whether companies would be able to pay back their debts given recent market performance.

The Tel Bond 40 Index lost 7 per cent as some of Israel's largest companies saw their stock value fall significantly, continuing a trend from last week.

Meanwhile, the Bank of Israel continued to say that the country's banks were stable, but the large Bank Leumi and Bank Hapoalim lost 6.5 per cent and 9.18 per cent respectively in trading.

Analysts said that the local market was mostly reacting, as investors panicked, to Wall Street's declines last week and the lack of clear policy statements by the Israeli financial leadership.

Some said investors were waiting to see how the US bailout plan approved by Congress last week affected US markets.

Finance Minister Roni Bar-On said after the markets opened to sharp declines that there was no panic among the leadership, the Israeli Haaretz daily reported. After closing, the director general of the ministry said the economy was stable.

Foreign Minister Tzipi Livni, in the midst of trying to form a government after Prime Minister Ehud Olmert resigned last month, said the economy was strong but needed good leadership to remain that way.