Israeli stock and bond prices slumped and many businesses closed on Sunday, a day after Hamas gunmen from Gaza killed hundreds of Israelis and kidnapped an unknown number of others.
The main Tel Aviv stock index ended nearly 7% lower, led by a 9% drop in banking stocks on a gain of 2.2 billion shekels ($573 million), and government bond prices fell as much as 3% in the market’s early reaction to the bloodiest attack on Israel in decades.
Although foreign exchange markets were closed on Sunday, the shekel was already at its weakest level this year following the government’s highly contested plans to overhaul the judiciary.
“This round of violence is expected to be more prolonged and severe than previous ones, clearly having a more negative impact on the economy and fiscal budgets,” said Jonathan Katz, chief economist at Leader Capital Markets.
“The shekel is very likely to weaken sharply tomorrow and we see a high probability that at some point the Bank of Israel will sell FX.”
Gunmen from the Palestinian group Hamas rampaged through Israeli cities on Saturday, killing at least 400 Israelis, before kidnapping dozens of hostages and returning to Gaza.
Israel has responded with airstrikes on Hamas targets in Gaza.
Israeli stock and bond prices plummeted and many businesses were closed due to Hamas attacks.MOHAMMED SABER/EPA-EFE/Shutterstock
Gaza militants also fired thousands of rockets into Israel, some reaching Tel Aviv, causing airlines to suspend flights to and from Israel.
Finance Minister Bezalel Smotrich said he had instructed the ministry’s department heads to immediately prepare the necessary budget to help manage the war.
The Bank of Israel said it was too early to assess economic damage from the conflict but pointed to a 50-day war with Hamas militants in Gaza in 2014 that caused damage of 3.5 billion shekels, or 0.3% of gross domestic product. The central bank has projected growth of 3% in 2023 and 2024.
AIR TRAVEL DISRUPTION
Delta Air Lines said flights to and from Israel to New York and Atlanta were canceled until Monday, while United Airlines said “future operations at TLV (airport) will be suspended until conditions allow them to resume.” Air India said flights to and from Tel Aviv will be suspended until Oct 14.
United Airlines’ smaller rival, Arkia, said it was operating rescue flights from Athens to bring home Israelis who had been on vacation.
Smoke and flames billow after Israeli forces attacked a tower in Gaza City, October 7, 2023. REUTERS
Another rival Israir ( ISRG.TA ) said it was operating rescue flights from Larnaca in Cyprus but warned it may operate a reduced schedule in the coming days because foreign crew on some of its leased planes have asked to leave Israel.
Nvidia, the world’s largest maker of chips used for artificial intelligence and for computer graphics, said it had canceled an AI summit scheduled for Tel Aviv next week, where CEO Jensen Huang was due to speak.
Schools are closed and many companies give workers the day off, and most shops other than supermarkets and pharmacies are closed.
Hamas celebrates on top of a captured Israeli tank.AP
The Israel Manufacturers Association said factories are still operating to limit fears of any shortages of food and other essential products.
“All companies will continue to operate as best they can despite difficult emergency situations, rocket attacks and labor shortages,” association president Ron Tomer said. “Thanks to Israel’s independence of production … even in times of emergency, the people of Israel will not lack anything.”
Intel Corp ( INTC.O ), Israel’s largest employer and exporter, declined to say whether chip production was affected.
“We are closely monitoring the situation in Israel and are taking steps to protect and support our employees,” a spokesman said.
Tower Semiconductor said it was operating as usual.
($1 = 3.8388 shekels)
Reporting by Steven Scheer Editing by Bernadette Baum
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Source: thtrangdai.edu.vn/en/
